January 24, 2020: Asian markets were slightly lower Friday but investor nerves eased after a week of volatility prompted by the rapid spread of a viral illness in China.
The coronavirus infection has killed at least 25 people while the number of confirmed cases has leapt to 830, health officials said.
Authorities have shut down public transport in seven cities — together home to more than 20 million people — at the epicentre of the outbreak in Wuhan.
“Markets are fearful the virus could spread, and even if it doesn't the impact on China could be large,” said National Australia Bank analyst Tapas Strickland in a note.
But the World Health Organization has stopped short of declaring a global health emergency — a rare instrument used only for the worst outbreaks.
“The WHO has provided a hefty dose of market prescribed penicillin that has lowered investors' fever for the time being,” said AxiCorp chief market strategist Stephen Innes.
Hong Kong was down 0.2 percent in morning trade while Tokyo was flat heading into the break.
Sydney was up 0.3 percent and Taipei rose 0.2 percent but Seoul fell 0.9 percent after South Korea reported its second confirmed coronavirus case.
Mainland Chinese bourses began a week-long break, a day after the Shanghai exchange shed nearly three percent in its worst pre-Lunar New Year market fall on record.
Fears remain that the holiday — when hundreds of millions of people travel across China — could catalyse a further spread of the virus and knock-on market headwinds.
“The fact the virus has spread to Singapore, an overly scrutinised customs entry point, suggests the best window for controlling the infection may have passed,” Innes said.
– Oil, US markets steady – Oil benchmarks stabilised after shedding around 1.5 percent on Thursday on fears the viral outbreak would hit the aviation and transport sectors.
“Traders remain incredibly twitchy about the effects the coronavirus outbreak could have on Chinese GDP and air travel more broadly,” Innes said.
Further slides would “very much depend on the stream of outbreak headlines”, he added.
New York weathered the battering of global equities on Thursday with sentiment shifting after confirmation the WHO would not yet declare a global emergency.
The Nasdaq edged to a new record, while the Dow finished slightly negative.
AFP/APP
32318
