March 11, 2020: Asian markets were mixed and oil rallied Wednesday, showing some much-needed stability after the previous days' gyrations, though uncertainty about the deadly coronavirus outbreak continues to weigh on sentiment.
Traders are keeping an eye on Washington after Donald Trump pledged relief measures as the disease spreads around the United States, fuelling concerns about the world's biggest economy and key driver of global growth.
US markets ended around five percent higher on Tuesday after suffering their worst day since the 2008 meltdown and tracking a strong bounce across Asia.
Safe-haven assets including the yen retreated, while yields on US Treasuries, which hit a record low on Monday, rose.
Investors struggled, however, to drive the rally into a second successive day.
Hong Kong and Singapore each edged up 0.1 percent, Shanghai added 0.4 percent and Manila rallied more than two percent. Wellington and Taipei were also up.
But Tokyo ended the morning 0.8 percent lower, while Sydney slipped 1.9 percent and Seoul shed 1.3 percent. Jakarta eased 0.5 percent.
Trump promised “major” economic measures to combat the impact on the US economy and held talks with Republican lawmakers, with an eye on a cut in payroll taxes as well as help for airlines, the cruise industry and small businesses.
The announcement from Trump came as other governments pledge to act against the outbreak.
Italy's leadership, which has put the entire country in quarantine, is eyeing a $16 billion package, while Japan has unveiled a multi-billion-dollar emergency package. Australia, Britain and Canada are expected to unveil measures in the coming days.
– 'Desperate need of leadership' – “Expectations for a 'major' fiscal stimulus package by the US government have underpinned sentiment — even if the volatility suggests the market still needs a bit of coaxing,” said AxiCorp's Stephen Innes.
“Indeed, investors were in desperate need of leadership from policymakers. Central banks can do their bit, but in times of viral cataclysm, it's governments that must be seen as in charge of the proceedings… Trump's actions evidenced how little it takes for markets to respond favourably.” However, while leaders gear up to fight COVID-19, the disease continues to wreak havoc across the planet, killing more than 4,000 people and infecting more than 118,000.
Crude prices jumped for a second day on policy response hopes.
The commodity had crashed by a third Monday in its worst day since the 1991 Gulf War after Saudi Arabia cut crude prices in a production row with Russia, sparking fears of a war for market share.
Support for oil also came from comments by Russian Energy Minister Alexander Novak, who told state-run TV channel Rossiya 24 that Moscow was open to cooperation with Riyadh and OPEC to address the price crisis, saying: “I want to say the doors aren't closed.” Analysts also said that signs of life returning to China's Hubei province — the centre of the outbreak — after weeks of quarantine were also helping the beleaguered crude market.