Asian Markets Mixed After Virus-fuelled Global Bloodbath
Mohammad Ali (@ChaudhryMAli88) Published February 25, 2020 | 08:20 AM
Hong Kong, (UrduPoint / Pakistan Point News - 25th Feb, 2020 ) :Asian markets were mixed Tuesday as bargain-buying after the previous day's bloodbath tempered fears that the coronavirus will develop into a pandemic and hammer the global economy.
News at the weekend that COVID-19 was now spreading and claiming lives far beyond China sparked a flood to safety on trading floors across the world, with the Dow on Wall Street suffering its worst day in two years.
With the death toll at around 2,700 and 80,000 infected, the World Health Organization said the outbreak had "peaked" in China but warned that all countries should prepare for a "potential pandemic".
"As the number of COVID-19 infections outside of China rises, investors are considering the potential ramification on the global economy beyond weaker growth in China and supply chain disruptions," JP Morgan Asset Management's Tai Hui said in a note.
"Equity markets will remain volatile in the near term, driven by new infection numbers around the world." Tokyo led losses as markets reopened to play catch-up with Monday's global sell-off.
The Nikkei ended the morning three percent lower, while Sydney and Wellington each shed 1.3 percent and Shanghai lost 0.9 percent.
Taipei and Jakarta were also lower. However, Hong Kong rose 0.2 percent and Seoul added 0.6 percent having plunged almost four percent Monday in reaction to a spurt of infections in South Korea at the weekend.
- Buying opportunity - While the region is suffering another broad retreat, the losses are being tempered by bargain-buying, while reports said a US firm had developed a possible vaccine that had been sent for testing.
And analysts said the recent losses would provide a good buying opportunity as they looked past the virus and contemplated an improving economic outlook.
World markets had been rallying at the start of the year on hopes for global growth in the wake of the China-US trade pact and as indicators suggested a slowdown appeared to be bottoming out.
David Wong, an investment strategist at AllianceBernstein in Hong Kong, said: "The benefit of global quantitative easing and the trade war truce should ultimately provide more upside to the global economy than the coronavirus will apply downside risk." The return to equity markets also saw gold fall sharply, losing more than two percent after hitting a seven-year high on Monday.
Oil prices, which tanked around 3.8 percent, were also slightly higher, though concern about the impact on demand for the commodity in China -- the world's top crude consumer -- was keeping gains subdued.
High-yielding, riskier currencies were also benefitting, with the South Korean won up 0.8 percent, Australia's Dollar 0.5 percent higher and the Mexican peso gaining 0.8 percent.
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