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GLOBAL MARKETS-Stocks wilt on growing doubts about U.S. virus response

Published 11/03/2020, 07:30
Updated 11/03/2020, 07:36
© Reuters.  GLOBAL MARKETS-Stocks wilt on growing doubts about U.S. virus response
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* Asian stock markets: https://tmsnrt.rs/2zpUAr4

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

* Lack of details about Trump stimulus unsettles markets

* Policymakers struggle to stay ahead of coronavirus

* Oil futures bounce again on output cut hopes

By Stanley White

TOKYO, March 11 (Reuters) - Asian shares and Wall Street

futures fell on Wednesday, as growing scepticism about

Washington's stimulus package to fight the coronavirus outbreak

knocked the steam out of an earlier rally.

Markets had been recovering from a brutal global selloff on

Monday that was triggered by the double shock of an oil price

crash and the worsening outbreak.

Those gains faded away in Asia, with U.S. stock futures

ESc1 falling 3% and MSCI's broadest index of Asia-Pacific

shares outside Japan .MIAPJ0000PUS down 1.3%. Australian

shares .AXJO were down 3.6%, while Japan's Nikkei stock index

.N225 slid 2.27%.

Euro Stoxx 50 futures STXEc1 were up 0.17%, but German DAX

futures FDXc1 were down 0.2%, and FTSE futures FFIc1 fell

0.56%.

Earlier this week, U.S. President Donald Trump said he would

take "major steps" to ease economic strains caused by the spread

of the flu-like virus. Headlines focused on discussions of

payroll tax cut, which helped lift market sentiment.

However, the lack of major announcements since then has left

some investors unimpressed.

"We were promised something substantive from the Trump

administration, and if it hasn't come yet at this hour, then it

looks like it is being delayed," said Michael McCarthy, chief

market strategist at CMC Markets in Sydney.

"That's why markets have a negative tone. From a global

investor's perspective, there are still a lot of downside

risks."

On Wall Street, all three major indexes jumped nearly 5% on

Tuesday, one day after U.S. equities markets suffered their

biggest one-day losses since the 2008 financial crisis.

The dollar resumed its decline against the yen JPY=EBS ,

the Swiss franc CHF=EBS and the euro EUR=EBS as uncertainty

set in.

Benchmark U.S. 10-year Treasury yields US10T=RR fell to

0.6644%. That was well above Monday's record low yield of

0.3180%, but analysts say yields could fall further because

there are still strong expectations that the U.S. Federal

Reserve and other central banks will support fiscal stimulus

with monetary easing.

Market participants largely expect the Fed to cut interest

rates for the second time this month at the conclusion of next

week's regularly scheduled policy meeting after surprising

investors last week with 50 basis point rate cut. FEDWATCH

The euro is also in focus before a European Central Bank

meeting on Thursday, where policymakers will face pressure to

ease policy after Italy put its entire country on lockdown in an

attempt to slow new coronavirus infections.

U.S. crude CLc1 rose 1.37% to $34.38 per barrel, while

Brent crude LCOc1 rose 1.96% to $37.95 in a topsy-turvy

session. Futures initially jumped on signs that U.S. producers

will cut output but then pared gains as the trading day

progressed.

On Monday, the oil market collapsed and futures saw their

largest percentage drop since the 1991 Gulf War as a price war

between Saudi Arabia and Russia broke out. Many analysts say investors need to remain on guard for

further market volatility because the coronavirus still poses a

risk to public health in many countries, which could place

additional strains on the global economy.

Spot gold XAU= , which is often bought as a safe-haven

during times of uncertainty, rose 0.71% in Asia to $1,639.78 per

ounce. GOL/

The virus emerged late last year in the central Chinese

province of Hubei but has since spread rapidly outside of China,

leading to more than 4,000 deaths.

Shares in China .CSI300 fell 0.89% on Wednesday. China

reported an uptick in new confirmed cases of coronavirus,

reversing four straight days of declines. Restrictions on movement and factory closures aimed at

stopping the epidemic are putting the brakes on global economic

activity.

1 Equities bonds total return indexes https://tmsnrt.rs/2IFLbPK

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(Editing by Sam Holmes and Jacqueline Wong)

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