Liquidity in financial markets has evaporated

TUESDAY

Most Asian shares fell a day after Wall Street's historic market rout, with fleeting initial gains evaporating as the corona-virus remained a major risk to economic growth.

• The safe-haven Japanese yen held largely firm , while risk-sensitive currencies struggled to stay afloat as coordinated moves by central banks failed to quell investor trepidation over the spreading corona-virus pandemic.

• South Korean won falls over 1%, Indonesian rupiah weakens

• Gold, which is normally bought as a safe-haven, extended declines as some investors chose to sell whatever they could to keep their money in cash.

• Oil futures rebounded in Asia, but downside risks remain due to an expected slump in global energy demand and Saudi Arabia's plans to increase crude output to expand its market share.

• The Swiss franc , another safe haven, was little changed at 0.9470 per dollar as traders pondered policymakers next moves. The dollar rose 0.3% to at 106.35 yen , recovering slightly from a 2% decline from the previous session as the Fed's rate rippled through financial markets.

OVERNIGHT

As Wall Street suffered its worst one-day rout in three decades on Monday, The S&P 500 tumbled 12% in its worst one-day drop since October 1987, just as growing numbers of investors began to work from home to slow the spread of the corona-virus that is already widely expected to throw the U.S. economy into a downturn. Some $2.69 trillion in market value was wiped from the S&P 500 as it suffered its third-largest daily percentage decline on record. Over the past 18 days, the benchmark index has lost $8.28 trillion.

• Precious metals that are heavily used in industrial production joined the massive selloff across financial markets that saw copper tumbling as investors’ risk appetite weakened.

• The monetary policy committee (MPC) of the Reserve Bank of India will take the call on an interest rate cut, the central bank’s Governor Shaktikanta Das said on Monday, adding that all options were on the table to counter the corona-virus blow.

• China posted a historic economic slump in the first two months of the year -- which was even larger than analysts feared. That offset support arising from a raft of stimulus measures rolled out by central banks across the world.

• Oil prices tumbled anew on Monday, with global benchmark Brent sinking 12%, as recession fear from the corona-virus crisis descended on markets and consultancy IHS Markit warned of a 1.3-billion-barrel crude surplus over the next six months, the biggest ever. WTI settled down $3.03 , or 9.5%, at $28.70 per barrel. Brent finished down $3.80, or 11%, at $30.05.

• The White House issued new U.S. corona-virus guidelines on Monday warning Americans to limit social gatherings to 10 or fewer people and urging restaurants, bars and other public venues to close in states where local transmission of the virus exists.