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Asian markets take a hit, while Crude oil falls to levels not seen since 1999

Asian share markets dropped drastically on Monday with corporate earnings reports and economic data expected to show the damage the global lockdown has caused due to the coronavirus pandemic.

China’s one-year loan prime rate was lowered by 20 basis points from 4.05% to 3.85%, while the five-year rate was cut by 10 basis points, from 4.75% to 4.65%.This is this the second that has had to be made this year, as China moves to support its wavering economy, which is trying to revive its economy after the three-month shutdown.

Jeffrey Halley, senior Asia-Pacific market analyst at Oanda said: “The weekend was relatively quiet on the news front by recent standards,”

He added: “With a vacuum of news, and after some strong rallies last week, equity markets in Asia could go either way from here, as momentum does not seem particularly strong in either direction. Headline trading will be the order of the day.”

Japan reported its exports fell almost 12% last month from a year earlier, with shipments to the United States down over 16%. A report on April manufacturing globally is due on Thursday and the market is expected to hit recession-era lows.

Japan’s Nikkei N225 also fell 1.1%, but Chinese shares SSEC moved up 0.3% as the benchmark lending rate was lowered.

Oil prices remained under pressure as the global lockdown saw fuel demand evaporate, leaving so much extra supply countries were finding it hard to find space to store it.

Meanwhile, Crude oil fell on Monday, with US futures dropping more than 10% to levels last seen in 1999. This comes as the US face storage facilities concerns, with demand evaporating due to the coronavirus pandemic.

The volume of oil held in US storage, especially at Cushing, Oklahoma, the delivery point for the US West Texas Intermediate (WTI) contract, is rising as refiners cut activity due to slumping demand.

The oil industry has started reducing output in the face of an estimated 30% decline in fuel demand worldwide due to the coronavirus pandemic.

Production cuts from OPEC and allies including Russia will kick in from May. The OPEC+ group has agreed to reduce output by 9.7 million bpd.

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