Business

Asia stocks arrest slide but investors on edge over Wuhan virus

SINGAPORE (REUTERS) – Asian share markets steadied on Wednesday (Jan 22) as investors took stock of the spread of a new strain of coronavirus from China and weighed the possible consequences of a global pandemic.

Fears of contagion, particularly as millions travel for Lunar New Year festivities, knocked stocks from record levels on Tuesday as investors swapped them for safer assets.

The outbreak has revived memories of the Severe Acute Respiratory Syndrome (Sars) epidemic in 2002-03, a coronavirus outbreak that killed nearly 800 people and hurt world travel.

MSCI's broadest index of Asia-Pacific shares outside Japan spent the morning trading either side of flat.

Japan's Nikkei opened 0.1 per cent lower, before steadying to trade flat, as did Korea's Kospi index. Australia's S&P/ASX 200 inched 0.3 per cent higher, while the safe havens of gold and US 10-year government bonds handed back some gains.

Singapore shares also advanced cautiously when trading began, with the Straits Times Index up 3.42 points or 0.1 per cent to 3,250.59 at 9:15am.

"After weeks of gains … the virus has loomed large because of the market's positioning," said Michael McCarthy, Chief Market Strategiest at brokerage CMC Markets in Sydney.

"The economic impact at this stage is zero. The pullback we've seen over the last 24 hours is the reflection of a potential threat."

The outbreak, from its origin in Wuhan, China, has reached the United States, Thailand, South Korea, Japan and Taiwan.

Authorities have confirmed more than 300 cases of the virus in China, mostly in Wuhan, where six people have died.

The World Health Organization (WHO) meets later on Wednesday to consider whether the outbreak is an international emergency.

On Wall Street overnight, the Dow Jones Industrial Average fell half a percent and the S&P 500 dropped almost a third of a percentage point, following larger losses in Asia.

SARS FLASHBACK

In Hong Kong, where the Sars outbreak buffeted the economy, the main stock index fell 2.8 per cent on Tuesday, its biggest one-day decline in over five months. Airline, travel, hotel and casino stocks were the hardest hit, along with China's yuan , which had its worst day since August.

"(This) virus is believed to be less serious than the Sars outbreak … but it does belong Read More – Source

Related Posts