Asia shares struggle for footing after fraught week
January 31, 2020
Asia shares struggle for footing after fraught week
SYDNEY (Reuters) - Asian share markets fought to regain their footing on Friday as investors clutched at hopes China could contain the coronavirus, even as headlines spoke of more cases and mounting deaths.
Helping the mood were surveys showing Chinese manufacturing activity came in much as expected in January while services actually firmed, though this was likely before the virus took full hold.
Indeed, reports some Chinese provinces were asking companies not to re-start until Feb. 10 suggested activity would take a hard knock this month.
For now, sentiment got a timely boost when Amazon’s sales blew past forecasts and sent its stock soaring 11% after hours, adding over $100 billion in market worth.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS managed to eke out a 0.2% gain, but was still down 4% on the week so far. Its 2.3% dive on Thursday had been the sharpest one-day loss in six months.
Japan's Nikkei bounced 1%, but again was off 2.5% for the week. E-Mini futures for the S&P 500 ESc1 added 0.1%, having rebounded 0.5% late on Thursday.
European bourses looked set to open firmer with EUROSTOXX 50 futures STXEc1 up 0.8% and the FTSE FFIc1 0.7%.
The World Health Organization on Thursday declared a global emergency as the virus spread to more countries.
Tedros Adhanom Ghebreyesus, WHO director-general, said the greatest worry was the potential for the virus to spread to countries with weaker health systems.
Yet investors took heart from his comments that the drastic steps Beijing was taking would “reverse the tide” and contain the outbreak.
“Some shorts covered after the director gave the WHO’s stamp of approval to China’s aggressive containment effort,” said Stephen Innes, Asia Pacific market strategist at AxiCorp.
“For now, the market’s risk lights have shifted from flickering on red to a steady shade of amber, which could bring more risk back into play.”
That helped Wall Street recoup its losses so the Dow finished up 0.43%, while the S&P 500 gained 0.31% and the Nasdaq 0.26%. After the bell, NASDAQ futures NQc1 pushed 1.3% higher on the Amazon results.
Still, the flow of news on the virus remained bleak with China’s Hubei province reporting deaths from the disease had risen by 42 to 204 as of the end of Jan. 30.
More airlines curtailed flights into and out of China and companies temporarily closed operations, while the US State Department told citizens not to travel to any part of China.
JPMorgan shaved its forecast for global growth by 0.3% points for this quarter to reflect the growing impact.
“Based on the patterns observed from other epidemics, we assume that the outbreak will likely run its course over 2-3 months, meaning the hit to activity happens in the current quarter” JPMorgan analysts said in a note.
“Also in line with historical experience, we expect a full recovery to follow.”
BONDS CAN’T BE BEAT
The drum beat of bad news kept safe-haven bonds well bid, with yields on US 10-year Treasuries US10YT=RR down 9 basis points for the week so far and near four-month lows.
The yield curve between three-month bills and 10-year notes had also inverted twice this week, a bearish economic signal.
In currencies, sterling held firm after jumping on Thursday when the Bank of England confounded market expectations by not cutting interest rates.
The pound was last at $1.3096 , a relatively calm performance given Friday is the day the UK officially leaves the European Union after years of political turmoil.
The dollar took a knock overnight when data showed the US economy grew at its slowest annual pace in three years and personal consumption weakened sharply.
Yet it was up a fraction on the yen on Friday at 109.07 . The euro held at $1.1025, while the dollar was steady on a basket of currencies at 97.923 .DXY.
Most of the action this week has been nervous investors selling emerging currencies for dollars and yen, leaving the majors little changed against each other.
Spot gold was only a shade firmer for the week at $1,572.11 per ounce XAU=, having failed to get much of a safe-haven bid as a range of other commodities, from copper to soy beans, were hammered by worries over Chinese demand.
Oil bounced on short covering, after hitting its lowest in three months as the global spread of the coronavirus threatened to curb demand for fuel.
US crude CLc1 regained $1.11 to $53.25 a barrel, while Brent crude LCOc1 futures rose 90 cents to $59.19.
92 News (also known as 92 News HD Plus (Channel 92) is a conservative Urdu language TV channel based in Lahore, Pakistan.
Mian Muhammad Hanif is the chairman of the channel.
This TV channel is a subsidiary of Madinah Group under Galaxy Media Group.
The channel's name, 92, is to celebrate the 1992 Cricket World Cup won by Pakistan. The number 92 is also the telephone country calling code of Pakistan, which is another major reason behind the channel's name.
92 News HD is Pakistan’s first HD Plus News Channel. Aims to bring credible & responsible News & important stories from Pakistan & around the World
We bring you Latest Pakistani and International News at 92 News Hd Plus to Read and Watch
We believe in genuine and true journalism, we do not prevail sensation just for ratings.
We do not hide news but never tend to add any unethical content or angling that goes against the norms of our religion Islam and Pakistan's culture.
We will never bother you as we have advance notification system for the latest news and updates. You will see a button at bottom of page to disable anytime.