BEIJING: Markets in Asia-Pacific rose on Wednesday following another positive lead from Wall Street with investor sentiment mixed about the immediate and long-term impact of the coronavirus outbreak.
The virus, officially named COVID-19 on Tuesday, has spooked markets around the world, having killed more than 1,100 people and infected tens of thousands since it emerged in central China at the end of last year.
Tokyo rose 0.5 percent, Hong Kong put on 0.7 percent, Sydney gained 0.6 percent and Singapore climbed 0.7 percent. Shanghai, Wellington and Taipei were also up.
The largely positive morning following fresh record closes by the S&P 500 and the Nasdaq in New York on Tuesday. Traders reacted positively to cautious comments from the US Federal Reserve Chairman Jerome Powell on the coronavirus — which has spread to more than two dozen countries and has been declared a global health emergency.
The Fed boss told Congress members on Tuesday that the central bank was closely monitoring the virus and that its impact could spill over to the world economy, but the assessment was not as gloomy as many had expected.
China, the world’s second-largest economy, is looking to recover momentum after authorities extended the Lunar New Year break in a bid to stop the spread of the virus.
But millions of people remain in lockdown in many cities, where transport has also been severely restricted — disrupting supply chains for key industries, including smartphones and cars.
There are concerns about how that will impact not only China’s overall economic growth, but also the bottom lines of many multinational firms. The production lines of major automakers such as South Korea’s Hyundai have already been disturbed, and there is fear that airlines and the hospitality and tourism sectors will also take a hit.
Many countries have imposed travel bans and quarantine requirements, and major carriers have suspended or dramatically cut back on flights to and from mainland China.
Aviation consultancy Ascend by Cirium said this week there was a reduction in flights from and within mainland China by roughly 25 percent, and predicted the impact on the industry could be worse than during the SARS outbreak of 2002-03.
A number of companies expected to be hurt by the coronavirus are scheduled to release their results this week, including Chinese e-commerce titan Alibaba and Japanese automaker Nissan. After tumbling on fears of decreased demand from China, the world’s largest importer and consumer of oil, crude prices continued their recovery.
Both main contracts were up on Tuesday, with Brent Crude rising 1.8 percent and West Texas Intermediate gaining 1.3 percent