A stark warning on Asia's economy pushed stocks in the region down on Thursday as investors braced for another report on the American labor market that could snuff out a rebound by European markets and US stock futures.
Japan's Nikkei 225 fell 1.3%, while Hong Kong's Hang Sang Index dipped 0.5% and Australia's S&P/ASX 200 fell 1%. The Shanghai Composite was among the few winners in Asia, posting a 0.3% gain.
The sell-off came as the International Monetary Fund warned that Asia will register zero growth this year because of the coronavirus.
"This is the worst growth performance in almost 60 years, including during the Global Financial Crisis and the Asian Financial Crisis," Chang Yong Rhee, Director of the IMF's Asia and Pacific Department, said in a blog post dated Wednesday.
It's the latest in a series of dire warnings on what the pandemic means for workers and companies.
"Investors will still need to adjust their expectations on corporate earnings in the next 6-12 months and this could be a source of equity market volatility, as we've seen in the [United States] and Europe," said Tai Hui, chief market strategist for Asia at J.P. Morgan Asset Management.
Yet European markets opened higher, rebounding from a drubbing on Wednesday. The FTSE 100 gained 0.7% in London, while France's CAC 40 and Germany's DAX added 1.2%. Chancellor Angela Merkel on Wednesday said Germany would gradually ease some restrictions on business starting next week, and Volkswagen announced a phased reopening of its European plants.
US stock futures were also higher ahead of another crucial report on US unemployment. Dow futures were last up 150 points, or 0.7%. S&P 500 futures gained 0.7% and Nasdaq futures were up 0.8%.
Nearly 17 million people have filed for initial unemployment benefits since the middle of March, as businesses closed to minimize the spread of the virus. Thursday's data is expected to show another 5.1 million people filed for their first week of unemployment in the week ended April 11.
The Dow and S&P 500 on Wednesday logged their worst trading day since April 1 after a wave of negative economic data and weak earnings.
The Dow dipped 445 points, or 1.9%. The S&P dropped 2.2% and the Nasdaq dropped 1.4%.
Bank of America and Citigroup reported lackluster earnings as they prepare for loan defaults incurred from the pandemic. Bank of America's first quarter profits dropped by 45%. The bank announced on Wednesday it has set aside $4.8 billion for credit losses linked to the virus.
Economic data also saw sharp declines. Retail sales in March tumbled 8.7%, the worst monthly decline since the department began tracking data in 1992.