* ASX recovers 8% loss for 4.4% gain
* Nikkei, Hang Seng, plunge then pare falls
* U.S. futures turn positive
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Tom Westbrook and Anshuman Daga
SINGAPORE, March 13 (Reuters) - Stocks plunged on Friday
with coronavirus panic selling hitting nearly every asset class
- before finding some kind of floor as hopes turned to a U.S.
stimulus package.
European and U.S. stock futures traded in positive territory
and some of Asia's deepest losses were recovered by the end of a
session, in which tight liquidity exaggerated moves.
Japan's Nikkei .N225 fell 10% before paring the drop to
close 6% lower. Australia's S&P/ASX200 .AXJO had its wildest
trading day on record, falling past 8% before surging in the
last minutes of trade to settle 4.4% higher after the close.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS was down 1.3% by mid-afternoon after being down
more than 5% during the morning.
The turnaround came as central banks from the United States
to Australia pumped liquidity into their financial systems and
as hopes grew that U.S. Democrats and Republicans could pass a
stimulus package on Friday. It was not clear if the late market moves signalled a
recovery in the dire sentiment that has wiped some $14 trillion
from world stocks in a month and had Asian markets in freefall
at the open.
While there was no firm explanation from investors on just
what prompted the late comeback, some believe the plunge may
have run its course for now.
"The prevailing market overreaction has more than priced
potential negative impacts to global economic activity," Krishna
Kumar, a portfolio manager at Eastspring Investments, said in a
note.
"Based on the current information, we do not see the recent
COVID-19 and/or oil price declines as permanent longer-term
issues for the companies in the fund," he said.
By late afternoon, Hong Kong's Hang Seng .HSI was down
3.5% and Korea's Kospi .KS11 - which had busted through
circuitbreakers earlier in the session - had recouped losses to
sit 3.7% in the red.
Gold and oil had steadied, but the bond market still bore
the scars of the morning's widespread plunge after the Dow Jones
posted its worst drop since the 1987 Black Monday crash.
In the somewhat calmer currency markets, the dollar held its
ground as investors nervous about systemic risks drove demand
for the world's reserve currency. FRX/
Majors stabilised after furious dollar buying overnight,
with the euro EUR= finding footing around $1.1200 and the
Aussie AUD=D3 recovering to $0.6300.
Emerging market currencies were punished: the won KRW= and
baht THB= dropped as far 1% and the rupiah IDR= 2%.
EMRG/FRX
FALLING KNIVES
The plunge, as the coronavirus pandemic spreads, gathered
pace after U.S. President Donald Trump spooked investors with a
move to restrict travel from Europe, and after the European
Central Bank disappointed markets by holding back on rate cuts.
In a televised address late on Wednesday, Trump imposed
restrictions on travel from Europe to the United States,
shocking investors and travellers. Traders were disappointed after hoping to see broader
measures to fight the spread of the virus and blunt its expected
blow to economic growth.
"Government bureaucracy simply has not kept pace with the
nature of the outbreak and market expectations," said Tai Hui,
Chief Asia Market Strategist, J.P. Morgan Asset Management.
"We need to see the number of new infections stabilise...we
also need to see fiscal and monetary policy support
implementation," he said.
"Hence, we are not looking at a specific time or valuation
to advise investors to add back equities."
Trade was halted on the S&P 500 .SPX. overnight after it
hit circuit breakers. It fell further when trade resumed,
eventually losing 9.5% to close 27% below February's peak.
The VIX volatility index .VIX - Wall Street's "fear gauge"
- and an equivalent measure of volatility for the Euro Stoxx 50
.V2TX hit their highest since the 2008 financial crisis.
In commodities, Brent crude LCOc1 rose 1.9% to $33.84 a
barrel after falling more than 7% on Thursday. U.S. crude CLc1
gained 2.4% to $32.26 per barrel.
(Editing by Sam Holmes)