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GLOBAL MARKETS-Asian stocks, Treasury yields fall as pandemic fears intensify

Published 26/02/2020, 01:46
© Reuters.  GLOBAL MARKETS-Asian stocks, Treasury yields fall as pandemic fears intensify
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* Asian stock markets: https://tmsnrt.rs/2zpUAr4

* Tracking the coronavirus: https://tmsnrt.rs/3aIRuz7

* Asian stocks fall; CDC warns Americans on virus

* Treasury yields remain near record lows

* Oil gains, but more downside risks seen

By Stanley White

TOKYO, Feb 26 (Reuters) - Asian shares fell on Wednesday as

a U.S. warning to Americans to prepare for the possibility of a

coronavirus pandemic drove another Wall Street tumble and pushed

yields on safe-haven Treasuries to record lows.

The S&P 500 .SPX and the Dow Jones Industrial Average

.DJI both shed more than 3% on Tuesday in their fourth

straight session of losses. That led MSCI's broadest index of Asia-Pacific shares

outside Japan .MIAPJ0000PUS down 0.6%. Australian shares

.AXJO were down 1.77%, while Japan's Nikkei stock index

.N225 slid 1.1%.

Yields on 10-year and 30-year U.S. Treasuries teetered near

record lows as worries about the economic impact of the virus

outbreak boosted safe-haven assets.

Oil prices recovered some recent losses in Asia, but there

are lingering concerns that expected output cuts by major oil

producers will not be enough to offset a decline in global

energy demand caused by the virus.

The World Health Organization says the epidemic has peaked

in China, but concern that its spread is accelerating in other

countries is likely to keep investors on edge.

"What we are seeing is share markets are playing catch up,"

said Michael McCarthy, chief market strategist at CMC Markets in

Sydney.

"Other asset markets have been flashing warning signs for

weeks. A corrective bounce in equities is possible, but we still

have a lot of downward momentum."

While the stock rout has been global, the recent pace of

selling in Asia has not been as severe as it has on Wall Street,

which has been hit hard by the escalation of virus cases outside

of Asia.

The S&P 500 lost $2.14 trillion in market capitalization

over the last four sessions, according to S&P Dow Jones Indices

analyst Howard Silverblatt.

U.S. stock futures ESc1 rose 0.5% in Asia on Wednesday,

but that did little to brighten the mood.

Adding to recent fears was an alert from the U.S. Centers

for Disease Control and Prevention on Tuesday warning Americans

to prepare for the spread of coronavirus in the United States,

signalling a change in tone for the Atlanta-based U.S. health

agency. The virus has claimed almost 3,000 lives in mainland China

but has spread to dozens of other countries. Of increasing

concern to investors, however, in the rising death toll in other

countries.

Drastic travel restrictions slammed the brakes on China's

manufacturing and consumer spending, and there are worries other

countries will face similar disruptions.

The yield on benchmark 10-year Treasury notes US10YT=RR

traded at 1.3521% on Wednesday in Asia, close to a record low of

1.3070% The 30-year yield US30YT=RR stood at 1.8274%, above a

record low of 1.7860%.

The decline in yields weighed on the dollar. The greenback

was last quoted at 110.25 yen, continuing a pullback from a

10-month high of 112.23 yen. JPY=EBS

The dollar traded at $1.0877 per euro EUR=EBS , off an

almost three-year high of $1.0778 reached on Feb. 20.

U.S. crude CLc1 ticked up 0.58% to $50.19 a barrel. The

Organization of the Petroleum Exporting Countries (OPEC) and

allies including Russia, a group known as OPEC+, have been

sending signals that they will cut output further. However, oil could come under more pressure as weekly U.S.

supply reports due later on Wednesday are expected to show a

rise in inventories, according to a Reuters poll. EIA/S

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