outbrain
Close  

Asian markets rebound on hopes for limited virus impact

/ 12:49 PM February 19, 2020

HONG KONG, China – 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.

ADVERTISEMENT

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

“Ultimately, it’s not Apple earnings reports rather the (People’s Bank of China) stimulus efforts that will drive the manufacturing rebound in China and fortify the supply chain dynamics which should underpin oil markets,” said Stephen Innes of AxiCorp.

FEATURED STORIES

“Don’t think the PBoC is going to sit in idle and watch the GDP guesstimates trickle lower, it might be time to get on board or risk getting left at the gas station.”

After four straight sessions in the red, Tokyo’s benchmark Nikkei 225 index rallied 0.7 percent, but lingering concerns over the economic toll from the virus capped gains.

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

Elsewhere, South Korea slipped 0.1 percent as the number of confirmed cases of the virus jumped by nearly half.

Sydney rose 0.1 percent and Taipei was 0.9 percent higher.

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.

ADVERTISEMENT

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

“It’s important to contextualize 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 favor 

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.

Both main contracts — Brent Crude and West Texas Intermediate — were up 0.3 percent.

Key figures around 0310 GMT

Tokyo – Nikkei 225: UP 0.7 percent at 23,359.60

Shanghai – Composite: DOWN 0.1 percent at 2,981.87

Hong Kong – Hang Seng: UP 0.4 percent at 27,651.41 (lunch)

Dollar/yen: UP at 110.03 from 109.87 (at 2200 GMT)

Euro/dollar: UP at $1.0799 from $1.0792

Pound/dollar: UP at $1.2997 from $1.2996

Euro/pound: UP at 83.09 pence from 83.01 pence

Brent Crude: UP 0.3 percent at $57.92 per barrel

West Texas Intermediate: UP 0.3 percent at $52.20

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

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

 GSG
Read Next
EDITORS' PICK
MOST READ
Don't miss out on the latest news and information.
View comments

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Apple, Asian shares, Asian stocks, China, markets, Stock Market, Virus
For feedback, complaints, or inquiries, contact us.


© Copyright 1997-2020 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.