Chinese officials have released a study showing most patients have mild cases of the coronavirus, and World Health Organization officials said the mortality rate was relatively low (AFP Photo/Anthony WALLACE)
Chinese officials have released a study showing most patients have mild cases of the coronavirus, and World Health Organization officials said the mortality rate was relatively low (AFP Photo/Anthony WALLACE)

Asian markets rebound on hopes for limited virus impact

By: AFP
Wed, Feb. 19, 2020
HONG KONG – 19 February 2020: Asian markets rebounded Wednesday as hopes the deadly new coronavirus will have only a short-term impact on corporate earnings and economic growth prevailed.

Falls on US and European markets -- after Apple's warning that it would miss its quarterly revenue forecast due to the epidemic -- did not carry over to Asia as investors bet on policymakers doing what is needed to minimise the fallout.

The illness, which has killed more than 2,000 people and infected over 74,000, has disrupted supply chains and forced the cancellation of high-profile sporting and cultural events.

As stimulus measures are rolled out in China and elsewhere, "Asia seems confident that the region's governments will 'do what it takes' to offset the coronavirus slowdown," Jeffrey Halley, senior market analyst for Asia at OANDA, said in a commentary.

After four straight sessions in the red, Tokyo's benchmark Nikkei 225 index closed up 0.9 percent.

Hong Kong was up 0.4 percent but mainland China's key Shanghai Composite Index was off 0.1 percent.

Elsewhere, South Korea was flat as the number of confirmed cases of the virus jumped by nearly half.

Taipei gained 0.9 percent and Sydney put on 0.4 percent.

The more sanguine mood came as Chinese officials released a study showing most patients have mild cases of the coronavirus, and World Health Organization officials said the mortality rate was relatively low.

IMF chief Kristalina Georgieva has said there could be a cut of around 0.1-0.2 percentage points to global growth but stressed there was much uncertainty about the virus's economic impact.

Anne Anderson of UBS Asset Management in Sydney played down concerns.

"It's important to contextualise the impact of the virus -- we're not expecting a permanent cut in global growth," Anderson told Bloomberg TV.

"The combination of the fiscal-monetary and the belief that we will transition through this over the coming months mean we're still on steady footing."

Gold in favour



Apple's announcement that it would miss its March quarter revenue forecast while global iPhone supplies would fall jolted markets and sparked renewed demand for safe-haven assets such as gold.

Not everyone is convinced the economic impact will be fleeting, however, suggesting Wednesday's gains could be temporary.

"The debate on whether (COVID-19) is a transient economic shock or worryingly a more longer-lasting global economic headwind appears to be shifting in favor of the latter following Apple's admission," said Rodrigo Catril of National Australia Bank.

China is the world's biggest importer and consumer of oil, and crude prices have been particularly sensitive to the epidemic that has spread to nearly 30 countries and territories.

Brent Crude was up 0.7 percent and West Texas Intermediate was 0.9 percent higher.

Key figures around 0630 GMT



Tokyo - Nikkei 225: UP 0.9 percent at 23,400.70 (close)

Shanghai - Composite: DOWN 0.1 percent at 2,980.91

Hong Kong - Hang Seng: UP 0.4 percent at 27,635.65

Dollar/yen: UP at 110.04 from 110.03

Euro/dollar: DOWN at 1.0795 from $1.0799

Pound/dollar: DOWN at 1.2993 from $1.2997

Euro/pound: DOWN at 83.08 pence from 83.09 pence

Brent Crude: UP 0.7 percent at $58.17 per barrel

West Texas Intermediate: UP 0.9 percent at $52.50

New York - Dow: DOWN 0.6 percent at 29,232.19 (close)

London - FTSE 100: DOWN 0.7 percent at 7,382.01 (close)
 
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