Stocks in the Asia Pacific region were mixed Wednesday morning as countries continued to put measures in place to battle the coronavirus pandemic.
Stocks in Australia led in losses among the major markets, with the S&P/ASX 200 declining 1.28% as shares of major banks such as the Commonwealth Bank of Australia and Westpac fell more than 2% each.
In Japan, the Nikkei 225 was fractionally lower during morning trade. Meanwhile, the Topix index was 0.15% higher.
Over in South Korea, the Kospi shed 0.4% while the Kosdaq index rose 0.16%.
The MSCI Asia ex-Japan index traded 0.35% lower.
Oil prices jumped in the morning of Asian trading hours, with international benchmark Brent crude futures up 2.07% to $32.53 per barrel. U.S. crude futures also surged 5.54% to $24.94 per barrel.
U.S. Markets Swing Both Ways
U.S. stocks finished lower Tuesday, far from session highs, thwarting a second session of gains despite signs that the COVID-19 pandemic may be leveling off in parts of the world.
Markets are keeping an eye on further U.S. plans to help dampen the recessionary impact of shutdowns and business closures.
At session highs early Tuesday, the Dow gained 937.25 points, or 4.1%, the S&P 500 rose 93.21 points, or 3.5%, and the Nasdaq went up 233.20 points, or 2.9%.
Then midday, a U-turn marked the largest blown gain over a session since October 2008 for both the Dow and S&P 500, according to Dow Jones Market Data.
What drove the market down?
Eagerness to buy beaten-down stocks on Wall Street faded in afternoon trade, even as investors focused on signs of a slowdown in new daily deaths and infections from COVID-19.
“Stocks are giving the impression that the market may have moved too far too quickly,” said Robert Pavlik, chief investment strategist at SlateStone Wealth. He told MarketWatch, “With yesterday’s major point gain and lack of a follow-through today, there is a thinking that some money is being taken off the table.”
The Volatile Jim Cramer and the Volatility Index
The CBOE volatility index, also known as the VIX, has been trending downward since mid-March. It went from a peak above 82 to under 46 at Tuesday’s close. In that same time period, the S&P 500 has risen nearly 12%.
The VIX, which typically runs inverse to the S&P 500, is dubbed the fear gauge and is used to forecast market volatility, measuring risk against investor sentiment.
CNBC’s Jim Cramer on Tuesday broke down a trusted technical analyst’s findings by analyzing the chart action of the S&P 500 and volatility indexes to determine the market’s next moves.
The “Mad Money” host took a pointer from volatility expert Mark Sebastian, founder of OptionPit.com, who cautions that the recent upside in the market is likely short-lived.
“The charts, as suggested by Mark Sebastian, the big fear — a total collapse of the economy and the stock market — I think has been taken off the table,” Cramer said, “but that doesn’t mean we’re ready to roar. Instead, he’s expecting a choppy market that may give you another leg down as the ugly economic data keeps rolling in.”