Black Friday is Now! Don’t miss out on up to 60% OFF InvestingProCLAIM SALE

GLOBAL MARKETS-Asia shares struggle for footing after rough virus-scarred week

Published 31/01/2020, 08:14
© Reuters.  GLOBAL MARKETS-Asia shares struggle for footing after rough virus-scarred week
EUR/USD
-
USD/JPY
-
XAU/USD
-
JP225
-
HK50
-
AMZN
-
GC
-
LCO
-
UK100
-
ESZ24
-
CL
-
EU50
-
US10YT=X
-
KS11
-
MIAPJ0000PUS
-

* Asian stock markets : https://tmsnrt.rs/2zpUAr4

* Nikkei bounces 1%, still down sharply for week

* China Jan PMI at 50 as expected, services stronger

* WHO confident China steps will contain virus

* Amazon surges 11% as sales beat forecasts

By Wayne Cole

SYDNEY, Jan 31 (Reuters) - Asian share markets fought to

regain their footing on Friday as investors clutched at hopes

China could contain the coronavirus, even as headlines spoke of

more cases, mounting deaths, flight suspensions and production

pauses at factories.

The World Health Organization on Thursday declared a global

emergency as the virus spread to more countries.

Tedros Adhanom Ghebreyesus, WHO director-general, said the

greatest worry was the potential for the virus to spread to

countries with weaker health systems. MSCI's broadest index of Asia-Pacific shares outside Japan

.MIAPJ0000PUS extended its fall, dropping 0.4%, to be poised

for its worst weekly loss in a year of 4.6%. Its 2.3% dive on

Thursday had been the sharpest one-day loss in six months.

Japan's Nikkei .N225 bounced 1%, but again was off 2.6%

for the week. Hong Kong's Hang Seng .HSI drifted 0.3% lower

and has shed 9% in the two weeks since the virus began roiling

financial markets. Korea's Kospi .KS11 had its worst week in

15 months, losing 5.6%.

Halting further slides were WHO comments that the drastic

steps Beijing was taking would "reverse the tide" and contain

the outbreak.

E-Mini futures for the S&P 500 ESc1 added 0.1%, having

rebounded 0.5% late on Thursday. European bourses looked set to

open firmer with EUROSTOXX 50 futures STXEc1 up 0.5% and the

FTSE FFIc1 0.5%.

Helping the mood, too, were surveys showing Chinese

manufacturing activity came in much as expected in January while

services actually firmed, though this was likely before the

virus took full hold. Indeed, reports some Chinese provinces were asking companies

not to re-start until Feb. 10 suggested activity would take a

hard knock this month.

"Some shorts covered after the director gave the WHO's stamp

of approval to China's aggressive containment effort," said

Stephen Innes, Asia Pacific market strategist at AxiCorp.

"For now, the market's risk lights have shifted from

flickering on red to a steady shade of amber, which could bring

more risk back into play."

Sentiment also received a timely boost when Amazon's

AMZN.O sales blew past forecasts and sent its stock soaring

11% after hours, adding over $100 billion in market worth.

Still, the flow of news on the virus remained bleak with

China's Hubei province reporting deaths from the disease had

risen by 42 to 204 as of the end of Jan. 30. More airlines curtailed flights into and out of China and

companies temporarily closed operations, while the U.S. State

Department told citizens not to travel to any part of China.

JPMorgan shaved its forecast for global growth by 0.3%

points for this quarter to reflect the growing impact.

"Based on the patterns observed from other epidemics, we

assume that the outbreak will likely run its course over 2-3

months, meaning the hit to activity happens in the current

quarter" JPMorgan analysts said in a note.

"Also in line with historical experience, we expect a full

recovery to follow."

BONDS CAN'T BE BEAT

The drum beat of bad news kept safe-haven bonds well bid,

with yields on U.S. 10-year Treasuries US10YT=RR down 9 basis

points for the week so far and near four-month lows.

The yield curve between three-month bills and 10-year notes

had also inverted twice this week, a bearish economic signal.

In currencies, sterling held firm after jumping on Thursday

when the Bank of England confounded market expectations by not

cutting interest rates. GBP/

The pound was last at $1.3098 GBP=D3 , a relatively calm

performance given Friday is the day the UK officially leaves the

European Union after years of political turmoil. The dollar took a knock overnight when data showed the U.S.

economy grew at its slowest annual pace in three years and

personal consumption weakened sharply. Yet it was up a fraction on the yen on Friday at 109.03

JPY= and stronger on the euro at $1.1016 EUR= .

Most of the action this week has been nervous investors

selling emerging currencies for dollars and yen, leaving the

majors little changed against each other. EMRG/FRX

Spot gold was flat for the week at $1,573.72 per ounce

XAU= , having failed to get much of a safe-haven bid as a range

of other commodities, from copper to soy beans, were hammered by

worries over Chinese demand.

Oil bounced on short covering, after hitting its lowest in

three months as the global spread of the coronavirus threatened

to curb demand for fuel. O/R

U.S. crude CLc1 regained 89 cents to $53.03 a barrel,

while Brent crude LCOc1 futures rose 83 cents to $59.12.

Asia stock markets https://tmsnrt.rs/2zpUAr4

Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

(Editing by Sam Holmes & Shri Navaratnam)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2024 - Fusion Media Limited. All Rights Reserved.