(Adds European stock futures, updates levels throughout)
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* MSCI ex-Japan rise, Japan's Nikkei stumbles
* Chinese shares on firm footing on stimulus hopes
* Japan's GDP shrinks at fastest pace in 6 years
* Singapore downgrades growth outlook due to coronavirus
By Swati Pandey
SYDNEY, Feb 17 (Reuters) - Asian shares reversed losses on
Monday and moved back toward a three-week top as China's
persistent efforts to cushion the blow from a coronavirus
outbreak calmed nervous investors, although Japanese stocks
faltered on growing recession risks.
Trading is expected to be light as U.S. stocks and bond
markets will be shut on Monday for a public holiday.
Reinforcing a slightly improving market mood, the pan-region
Euro Stoxx 50 futures STXEc1 rose 0.3% in early European
trades, German DAX futures FDXc1 climbed 0.4% while London's
FTSE futures FFIc1 added 0.2%. E-Mini futures for the S&P500
were up 0.3%.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS advanced 0.3% to be within kissing distance of
last week's peak of 558.30, which was the highest since late
January.
The gains were helped largely by Chinese shares with the
blue-chip index .CSI300 there jumping 2% after the country's
central bank lowered one of its key interest rates and injected
more liquidity into the system. Also whetting risk appetite was an announcement by China's
Finance Minister on Sunday that Beijing would roll out targeted
and phased tax and fee cuts. Fears about the jolt to the world economy from the
coronavirus still lingered though as the number of reported new
cases in China rose to 2,048 as on Sunday from 2,009 the
previous day.
Restrictions were tightened further in Hubei over the
weekend with most vehicles banned from the roads and companies
told to stay shut until further notice.
China's "containment measures suggest that activity is only
likely to normalise by mid-March at best and more likely end
Q1," said Jefferies analyst Sean Darby.
"The question remains over the degree of stimulus to be
required given the country's fiscal position."
Japan's Nikkei .N225 stumbled 0.7% after the country's
economy shrank at the fastest pace in almost six years in the
December quarter. The hit to the world's third-largest economy comes amid
fresh concerns about weakness in the current quarter, as the
coronavirus damages output and tourism, stoking fears Japan may
slump into a recession.
Trade-dependent Singapore downgraded its 2020 economic
growth forecast due to the coronavirus, while China's economy is
also widely expected to take a sharp hit. RUN
South Korea's KOSPI index ended mostly flat while
Australian, Singapore and Malaysian share indexes were a tad
Asia's woes have yet to spread to the United States, with
Wall Street indexes scaling record highs. .N
Talk of a U.S. middle class tax cut and a proposal to
encourage everyday Americans to invest in the equities market
boosted share market sentiment late last week, Betashares chief
economist David Bassanese said.
Bassanese had misgivings about the plan, saying it reminded
him of former U.S. President George Bush encouraging Americans
to buy a home during a housing boom.
"It adds to my suspicion that this decade-long bull market
could eventually end via a blow-off bubble, driven by central
bank persistent low interest rate policy," he said in a note.
Later in the week, flash manufacturing activity data for
February are due for the Eurozone, the United Kingdom and the
United States, which is likely to capture at least some of the
early impact of the viral epidemic.
Action was relatively muted in the currency markets, with
the dollar a touch firmer against the yen at 109.84 JPY= . It
was unchanged on the pound at $1.3043 and slightly weaker on the
The risk-sensitive Aussie AUD=D3 , which is also played as
a liquid proxy for Chinese assets, ticked up 0.2% to $0.6729.
That left the dollar index flat at 99.141.
In commodities, gold XAU= inched lower to $1,581.50 an
ounce.
Oil futures were mixed with Brent crude LCOc1 flat at
$57.32 a barrel and U.S. crude adding 9 cents to $52.14. O/R
Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
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