Asian stocks slumped on Monday amid an escalation between U.S. and China after President Trump said there is evidence that the coronavirus originated in China and an investigation is underway. Investors also focus on reopening plans from several countries across the globe. There are some reports that the Japanese government will extend the country’s state of emergency by the end of May. Wall Street finished with 3% losses on Friday.
On the economic calendar, the main event of the week will be on Friday the U.S. non-farm payrolls with analysts expecting to fall by 22 million in April compared with a drop of 701,000 the previous month. The U.S. unemployment rate will hit almost 16.3%, up from 4.4% in March.
The Hang Seng Index is 2.84% lower at 23,672. The Aussie ASX 200 index managed to rebound from Friday’s heavy losses and finished 1.41% higher at 5,319. Nikkei 225 was closed for holidays.
ASX 200 lost 5% on Friday marking the worst day in the last five weeks. Today the index managed to rebound from early losses, with help from banks and gold miners finished 1.41% higher at 5,319. The Australia Building Permits came in at -4% above the expectations of -15% in March. Australia’s Inflation declined to -0.1% in April from 0.2% in March. Australia’s Job Advertisements declined to -53.1% in April from -10.3% signalling that unemployment will increase in April due to coronavirus outbreak.
On the technical side, the index failed last week to break above the 50-day moving average, and the technical outlook remains bearish for the long term.
On the downside, first support for ASX 200 stands at 5,169 the daily low. If the selling pressure persists, the next support area is at 5,102 the low from April 22. Next support to watch will be at 5,003 the low from April 3.
On the upside, first resistance stands at 5,328 the daily top. More offers might emerge at 5,540 the 50-day moving average. On a breakout to the upside, buyers will be looking for an extension to the high from March 12. at 5,728.