Asian markets mixed after spike in coronavirus cases

by AFP/ pic by AFP

HONG KONG – Asian markets were mixed on Thursday after a dramatic spike in the number of coronavirus deaths and cases in mainland China, with traders concerned about the scale of the epidemic.

Chinese authorities have changed the way they count infections from the virus — officially named COVID-19 – and the latest reports propelled the nationwide death toll to 1,355 and the infection count to nearly 60,000.

The announcement briefly pushed Hong Kong into the red soon after it opened 0.5 percent higher. Mainland China’s benchmark Shanghai Composite Index was up 0.1 percent.

Tokyo was up 0.1 percent after opening 0.1 percent lower.

Elsewhere, Sydney was up 0.3 percent, Seoul put on 0.6 percent and Taipei rose 0.4 percent.

The new virus numbers dampened the positive cue from Wall Street overnight, where the three main indexes all set fresh records.

Traders in Europe were also in a positive mood on Wednesday, with Frankfurt hitting a record close and Paris ending at its highest level this year.

The jump in China coronavirus numbers “has initially hit like a ton of bricks given this is one of the market’s biggest fears”, Stephen Innes, chief market strategist at AxiCorp, wrote.

But he added that despite the “gnarly” headlines, the rise could be the result of a testing backlog being cleared over the weekend in Hubei province, where the virus emerged late last year.

Markets ‘jolted’

China has been praised by the World Health Organization (WHO) for its transparent handling of the outbreak.

There is, however, still scepticism among the global public, with suggestions that Beijing may be concealing the scale of the problem the way it did during the 2002-2003 SARS epidemic.

“Just when markets were getting comfortable with the idea that the COVID-19 infection increase was trending lower, the sudden jump in the number of new cases in Hubei has jolted them out of this sense of complacency,” Khoon Goh, head of Asia research at Australia & New Zealand Banking Group, told Bloomberg News.

COVID-19 has threatened to harm the Chinese economy, the world’s second-largest, with ANZ bank warning that China’s first-quarter GDP growth would slow to 3.2-4.0 percent, down from a previous projection of 5.0 percent.

In a Wednesday meeting, China’s top leadership called for efforts to minimise the impact of the outbreak and pledged measures to help firms deal with the economic fallout.

China is the world’s biggest importer and consumer of oil, and crude prices have been particularly sensitive to the epidemic.

After dropping for weeks, oil has stabilised this week and both contracts avoided a major dip Thursday.

Brent Crude was up 0.3 percent and West Texas Intermediate was 0.5 percent higher.

Key figures at 0310 GMT

  • Tokyo – Nikkei 225: UP 0.1 percent at 23,875.75
  • Hong Kong – Hang Seng: UP 0.1 percent at 27,837.67
  • Shanghai – Composite: UP 0.1 percent at 2,928.24
  • Euro/dollar: DOWN at 1.0869 from $1.0873 at 2200 GMT Wednesday
  • Pound/dollar: UP at $1.2960 from $1.2956
  • Euro/pound: DOWN at 83.87 pence from 83.89 pence
  • Dollar/yen: DOWN at 109.92 from 110.09
  • Brent Crude: UP 0.3 percent at $55.94 per barrel
  • West Texas Intermediate: UP 0.5 percent at $51.41 per barrel
  • New York – S&P 500: UP 0.7 percent at 3,379.45 (close)
  • New York – Nasdaq: UP 0.9 percent at 9,725.96 (close)
  • New York – Dow: UP 0.9 percent at 29,551.42 (close)
  • London – FTSE 100: UP 0.5 percent at 7,534.37 points (close)

Bloomberg News contributed to this story