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Asian Stocks Continue Retreat Amid Deep Oil Losses

By Gina Lee – Asian stock markets continued their retreat on Wednesday in reaction to oil’s sharp losses in its previous session.

Even the news that the U.S. Senate passed a $484 billion pandemic relief package overnight failed to assuage investor jitters. The package is set to be debated by the House as soon as Thursday.

Japan’s Nikkei 225 dropped 1.33% by 10:25 PM ET (3:25 AM GMT), and neighboring South Korea’s KOSPI lost 1.20%.

Down Under, the ASX 200 lost 1.52%. Hong Kong’s Hang Seng Index dropped 0.93% whilst China’s Shanghai Composite slid 0.01% and the Shenzhen Component lost 0.24%.

“The oil reality check has triggered a reassessment across risk assets,” Rodrigo Catril, senior foreign exchange strategist at National Australia Bank, told CNBC.

Meanwhile, the ongoing earnings season continues to add to investors’ woes. A drop in capital investment looks inevitable as corporates report dismal profits with no insight into the remainder of the year amid the COVID-19 pandemic.

“There’s no way you can predict earnings right now,” Michael Cuggino, portfolio manager at Pacific Heights Asset Management LLC, told Bloomberg.

“It’s virtually impossible until we have more visibility with respect to how to world comes out of the coronavirus on the other side.” 

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