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SINGAPORE/NEW YORK - World stock markets fell on Thursday, while bonds and the dollar held on to hefty gains, after a coronavirus-driven plunge in U.S. retail sales and factory production and increasing gloomy economic outlooks for Asia.
U.S. retail sales fell the most on record last month, while manufacturing output fell by the most in 74 years, raising fears of a deep recession.
In Asia, growth will grind to zero for the first time in 60 years in 2020, the International Monetary Fund said on Thursday, as exporters are pounded by slumping demand and anti-virus measures force consumers to stay home and shops to shut down.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.6%. In Japan, where a Reuters survey showed most firms feel stimulus measures announced so far are insufficient, the Nikkei fell 1.3%.
E-mini futures for the S&P 500 were 0.3% lower following a 2.2% drop on Wall Street overnight.
"It's just a reminder of how deep the economic weakness has been," said Paul Chew, head of research at Singapore brokerage Phillip Securities.
The relatively modest drop shows some level of optimism about a brisk re-start, he said, but added: "The problem is, no-one knows how long this will go for."
Benchmark indexes in Australia, Korea, Hong Kong and Shanghai also posted falls between 0.3% and 1.5%. China is expected to report on Friday that the health crisis likely knocked its economy into its first decline on record.
The dollar rose against most major currencies and the yield on benchmark 10-year U.S. Treasuries held at 0.6348%, near the week-low hit on Wednesday.
Oil prices, a barometer of global growth, crept from overnight lows but remained weak as poor demand outweighs support from a record output cut agreed last weekend.
West Texas Intermediate crude rose 60 cents a barrel or 3% from its lowest close since 2002 to $20.46, and Brent crude rose 80 cents to $28.50 a barrel.
The grim outlook was further underscored by warnings from major U.S. banks Goldman Sachs Group Inc and Citigroup Inc of future loan losses as they posted drops in profits.
Markets are bracing for more bad news when U.S. weekly jobless claims - which have been in the millions for the past three weeks - are published at 1230 GMT.
A figure of 5.1 million is expected, according to a Reuters poll, and trepidation was reflected in currency markets. The safety of the U.S. dollar was sought with the yen, euro, pound and Antipodean currencies slipping.
The dollar last bought 107.78 yen and hit a week-high $0.6282 per Australian dollar.
It advanced furthest against the kiwi, rising about 0.7% to $0.5955 after New Zealand's central bank governor said negative rates are a possibility.
Adding to traders' worries, the dire economic news also came with sharp rises in COVID-19 fatalities.
The United States is the world's worst-affected country and its coronavirus death toll topped 30,000 on Wednesday. The fatalities have doubled in a week and set a record single-day increase for the second day in a row.
New cases are slowing and President Donald Trump said he would announce guidelines for reopening the economy on Thursday.
However, state governors - especially on the East Coast - seem to be pushing for a cautious approach.
"Markets are looking for the peak in the viral spread, but this is only the start of a very bumpy road back to economic strength," said Kerry Craig, global market atrategist at J.P. Morgan Asset Management.
"Investors should remain vigilant to what the market is pricing and realise that market rallies in a longer bear market are not unusual."
(Reporting by Tom Westbrook in Singapore and Koh Gui Qing in New York; Editing by Sam Holmes)