Asian markets mixed after virus-fuelled global bloodbath

26 February, 2020 12:00 AM printer

HONG KONG: Asian markets were mixed on Tuesday as bargain-buying after the previous day’s bloodbath tempered fears that the coronavirus will develop into a pandemic and hammer the global economy.

News at the weekend that COVID-19 was now spreading and claiming lives far beyond China sparked a flood to safety on trading floors across the world, with the Dow on Wall Street suffering its worst day in two years, report agencies.

With the death toll at around 2,700 and 80,000 infected, the World Health Organization said the outbreak had “peaked” in China but warned that all countries should prepare for a “potential pandemic”.

“As the number of COVID-19 infections outside of China rises, investors are considering the potential ramification on the global economy beyond weaker growth in China and supply chain disruptions,” JP Morgan Asset Management’s Tai Hui said in a note.

“Equity markets will remain volatile in the near term, driven by new infection numbers around the world.”

Tokyo led losses as markets reopened to play catch-up with Monday’s global sell-off.

The Nikkei ended the morning 3 per cent lower, while Sydney and Wellington each shed 1.3 per cent and Shanghai lost 0.9 per cent.

Taipei and Jakarta were also lower. However, Hong Kong rose 0.2 per cent and Seoul added 0.6 per cent having plunged almost 4 per cent Monday in reaction to a spurt of infections in South Korea at the weekend.

While the region is suffering another broad retreat, the losses are being tempered by bargain-buying, while reports said a US firm had developed a possible vaccine that had been sent for testing.

And analysts said the recent losses would provide a good buying opportunity as they looked past the virus and contemplated an improving economic outlook.

World markets had been rallying at the start of the year on hopes for global growth in the wake of the China-US trade pact and as indicators suggested a slowdown appeared to be bottoming out.