Asian markets rebound

23 January, 2020 12:00 AM printer

HONG KONG: Asian markets bounced back Wednesday on bargain-buying following the previous day’s sharp losses but investors remained on edge after a deadly virus from China was confirmed to have spread to the United States.

Global equities took a severe hit on fears the new outbreak, which has killed nine and sickened hundreds, could cause as much economic damage as the SARS epidemic that killed hundreds of people in 2003, reports AFP.

Shanghai dived more than one percent in early trade, extending the previous day’s 1.4 percent drop, with authorities battling to contain the coronavirus strain as China prepares for the Lunar New Year holidays, when millions of people travel across the country.

Officials warned Wednesday the strain could mutate and spread.

However, Chinese mainland shares performed a U-turn to end the day with gains.

Tourism-linked firms—which had been hit by concerns about the impact on the global economy just as it shows signs of a tentative recovery from a long-running slowdown—also enjoyed a reverse.

After a sell-off in Asia on Tuesday, news that the US had reported its first case of the new virus hit Wall Street with the Dow and S&P 500 sinking from record highs.

Fears of a bigger outbreak rose after a prominent expert from China’s National Health Commission confirmed Monday that the virus can be passed between people.

The World Health Organization will hold an emergency meeting later Wednesday to determine whether to declare a global public health emergency over the disease, which has also been detected in Thailand, Japan, South Korea and Taiwan.

“While it is still early days, there is a risk that any outbreak could depress consumer sentiment and spending, including tourism as well as travel and transport-related business,” said National Australia Bank’s Rodrigo Catril.

“In addition to the sad and devastating human cost, (SARS) also had an economic impact with epicentres such as Hong Kong enduring a short-lived recession.