Asian stocks witnesses modest gains on Thursday amid Coronavirus fears

Asian stocks witnesses modest gains on Thursday amid Coronavirus fears

Asian stocks witnesses modest gains on Thursday amid Coronavirus fears
Advertisement

Asian stocks gained on fourth day of the business week, cheered by record closes in Wall Street benchmarks after encouraging economic data.

However the Asian stocks investors on the other hand are keeping an eagle eye on the deadly coronavirus outbreak.

Reuters reported that MSCI s broadest index of Asia-Pacific shares outside Japan .

MIAPJ0000PUS gained 1.14% while Japan s Nikkei .N225 rose 2.07%.

Mainland Asian stocks shares edged up, with the bluechip CSI300 index .CSI300 up 0.87%, helped by policymakers  efforts to prevent heavy selling, including liquidity injections and de facto restrictions on selling.

Advertisement

“It is difficult for investors to sell Chinese shares now given the authorities’ stance is very clear,” said Naoki Tashiro, president of TS China Research.

“Still, until the spread of the virus stops, market stabilisation steps won’t completely change investor psychology.”

On Wall Street, far from the epicentre of the outbreak, the mood was brighter as the S&P 500 .SPX gained 1.13% to a record close of 3,334.69 while the Nasdaq Composite .IXIC added 0.43% to 9,508.68, also a record high.

The ADP National Employment Report showed private payrolls jumped 291,000 jobs in January, the most since May 2015, while a separate report showed U.S. services sector activity picked up last month. Both indicators suggest the economy could continue to grow this year even as consumer spending slows.

Traders also cited vague rumours of a possible vaccine or a drug breakthrough for the coronavirus as a trigger for Wednesday’s stock rally, although they also said such catalysts were likely to simply be an excuse for short-covering.

The World Health Organization played down media reports on Wednesday of “breakthrough” drugs being discovered to treat people infected with the new coronavirus.

Advertisement

Coronavirus Death toll rises

Another 73 people on the Chinese mainland died on Wednesday from the virus, the highest daily increase so far, bringing the total death toll to 563, the country’s health authority said on Thursday.

“Despite all the efforts by the Communist Party, the virus is becoming a major global disaster.”

Considering workers usually start to return to hometown about a week before the Lunar New Year, many patients must have left Wuhan before its lockdown on Jan. 23,” TS China Research’s Tashiro said.

Statistics from China indicate that about 2% of people infected with the new virus have died, suggesting it may be deadlier than seasonal flu but less deadly than SARS, another reason investors remained relatively calm.

“The coronavirus is continuing to spread so we need to remain cautious.

Advertisement

But markets now appear to think that there will be a quick economic recovery after a short-term slump,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.

The 10-year U.S. Treasuries yield rose back to 1.654% US10YT=RR from a five-month low of 1.503% set last Friday.

In the currency market, the safe-haven Swiss franc and the yen retreated.

The franc CHF=EBS eased to 0.9738 franc per dollar, having lost 0.4% on Wednesday.

The yen stepped back to 109.98 yen JPY=, compared with a three-week high of 108.305 hit on Friday.

The euro stood flat at $1.0998 EUR=, having shed 0.4% in the previous session.

Advertisement

In commodities, U.S. West Texas Intermediate (WTI) crude CLc1 gained 2.17% to $51.85 per barrel, extending its rebound from a 13-month low of $49.31 touched on Tuesday.

Still it is down about 15% so far this year.

Copper, considered a good gauge on the health of the global economy because of its wide industrial use, showed some signs of stabilisation although it remained depressed overall.

Shanghai copper SCFc1 extended its rebound into the third day, rising 1% from 33-month low hit earlier this week. It is about 5% below its levels just before the start of Lunar New Year holidays.

“One has to wonder whether China can meet its trade agreement with the U.S. to increase imports by $200 billion, which looked very difficult to begin with,” said a manager at a U.S. asset management firm.

“Before the outbreak, a mini goldilocks market was everyone’s consensus. But we have to see whether we need to change such a view,” he added.

Advertisement
Advertisement
Read More News On

Catch all the Business News, Breaking News Event and Latest News Updates on The BOL News


Download The BOL News App to get the Daily News Update & Follow us on Google News.


End of Article

Next Story