Asian stock markets rebound, following Wall Street higher

BEIJING (AP) – Asian stock markets followed Wall Street higher yesterday, at least temporarily shaking off jitters about China’s virus outbreak.

Benchmarks in Hong Kong and South Korea rose, rebounding from big declines on Monday, and Shanghai also advanced. Tokyo fell for a second day.

“Concerns over the coronavirus appear to have once again receded,” Jingyi Pan of IG in a report.

Wall Street’s benchmark S&P 500 index closed at a new high on Monday, recovering from Friday’s decline.

Anxiety about the virus has been partially offset by stronger United States (US) corporate earnings and expectations that global central banks will step in to support economic growth.

Currency traders work at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea. PHOTO: AP

Hong Kong’s Hang Seng index surged 1.2 per cent to 27,583.02 while the Kospi in Seoul rose 0.9 per cent to 2,221.14. The Shanghai Composite Index added 0.3 per cent to 2,900.14. Tokyo’s Nikkei 225 lost 0.6 per cent to 23,685.98 while the S&P-ASX 200 in Australia gained 0.5 per cent to 7,048.90.

India’s Sensex opened up 0.9 per cent at 41,362.61. New Zealand, Singapore and Indonesia also advanced.

Asian markets slid on Monday after analysts warned investor optimism that China’s disease outbreak was under control might be premature.

The government reported 108 deaths in the 24 hours through midnight on Monday, the first time the daily fatality toll exceeded 100.

That raised mainland China’s death toll to 1,016 with 42,638 confirmed cases, most of them in the central province of Hubei, where the virus emerged last December.

China extended its Lunar New Year holiday to discourage travel and keep factories and offices closed in a bid to contain the disease. Businesses are gradually reopening and the government has promised low-interest loans and tax cuts but airlines and other industries face potentially huge losses.

The impact abroad is spreading. On Monday, Sony and Amazon became the latest companies to pull out of a major European technology show due to virus fears.

“The cause for unbridled relief (much less optimism) is illusory,” Vishnu Varathan of Mizuho Bank said in a report.

On Wall Street, the S&P 500 rose 0.7 per cent to 3,352.09 on gains by technology stocks, retailers and restaurants.

The Dow Jones Industrial Average rose 0.6 per cent to 29,276.82. The Nasdaq climbed 1.1 per cent to 9,628.39. Traders shifted money into US government bonds and bid up the price of gold. Both can signal unease. Investors mostly shunned energy and materials stocks, which depend upon economic growth more than other sectors do.