Asian markets rebound on hopes for limited virus impact
Hong Kong: 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.
“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.
“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.
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 favour 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. – AFP