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GLOBAL MARKETS-Asia shares fragile amid China worries, oil sinks

Published 04/02/2020, 01:30
Updated 04/02/2020, 01:36
© Reuters. GLOBAL MARKETS-Asia shares fragile amid China worries, oil sinks
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* Asian stock markets : https://tmsnrt.rs/2zpUAr4

* Eyes on China stocks after Wall St bounces

* Coronavirus death toll continues to rise

* Oil leads commodity slide on fears for China demand

By Wayne Cole

SYDNEY, Feb 4 (Reuters) - A fragile calm gripped Asian

shares on Tuesday as investors waited anxiously to see if

Beijing could stem the rout in Chinese assets, while oil hit

13-month lows as the coronavirus throttled demand in the world's

biggest importer of fuel.

Brent crude LCOc1 futures crashed to $54.11 a barrel,

bringing losses for the year so far to 18%, while U.S. crude

CLc1 sank to $49.99. O/R

China's central bank has flooded the economy with cash while

trimming some key lending rates, but analysts suspect more will

have to be done to offset the economic fallout from the virus.

The total number of virus deaths in China reached 425 as of

Monday, from 20,438 cases. "Given the extent of the shutdowns in China as well as the

rapid rise in the virus that is likely to continue through March

or April, a significant hit to China and regional growth is very

likely," said JPMorgan economist Joseph Lupton.

"We would assume that in addition to bridging any funding

stresses, fiscal policies will need to be ramped up to support

growth once the contagion gets under control."

Shanghai blue chips .CSI300 slid almost 8% on Monday as

markets resumed from the Lunar New Year holiday.

A swath of commodities from copper to iron ore joined oil in

the dumpster amid fears the drag on Chinese industry and travel

would sharply curb demand for fuel and resources.

Early Tuesday, MSCI's broadest index of Asia-Pacific shares

outside Japan .MIAPJ0000PUS had inched up 0.1%, led by gains

in South Korea .KS11 and Australia .AXJO . Japan's Nikkei

.N225 pared opening losses to be off 0.2%.

E-Mini futures for the S&P 500 ESc1 were flat after

results from Alphabet Inc GOOGL.O disappointed, though that

followed a 0.7% bounce overnight. Wall Street had taken comfort in a surprisingly solid

reading of U.S. manufacturing and the Dow .DJI ended Monday

with a rise of 0.51%, while the S&P 500 .SPX gained 0.73% and

the Nasdaq .IXIC 1.34%.

Factory activity rebounded in January after contracting for

five straight months amid a surge in new orders. The ISM index rose to 50.9, the highest since July, from an

upwardly revised 47.8, though the survey was taken before the

virus spread in earnest.

The upbeat report nudged Treasury yields up from deep lows

and gave the U.S. dollar a modest lift.

The dollar firmed to 108.68 yen JPY= , from an overnight

low of 108.30, while the euro faded a fraction to $1.1059 EUR=

but remained well within recent snug ranges.

Against a basket of currencies, the dollar bounced back to

97.837 .DXY from a trough of 97.406.

Sterling was nursing a grudge at $1.2990 GBP= having shed

1.6% overnight when the UK government laid out a tough opening

stance for future trade talks with the European Union following

its departure from the bloc last week. GBP/

The fall erased all the gains made after the Bank of

England's decision last week to keep interest rates on hold.

Spot gold was off at $1,577.48 per ounce XAU= , from a top

of $1.591.46, as the dollar firmed and safe haven demand waned a

little. GOL/

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

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

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(Editing by Sam Holmes)

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