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Asia Stocks Higher in Early Trade, but Buying Remains Tentative

James Hyerczyk

The major Asia Pacific stock indexes are trading higher early Tuesday as investors continue to weigh the potential economic impact of the ongoing coronavirus outbreak that has killed hundreds in China so far. The early price behavior could be an indication that investors feel the virus will be primarily contained in China. It could also be a knee-jerk reaction to the stimulus the People’s Bank of China injected into the markets to prevent a stock market crash.

At 02:26 GMT, Japan’s Nikkei 225 Index is trading 23007.39, up 35.45 or +0.15%. Hong Kong’s Hang Seng index is at 26639.14, up 282.16 or +1.07% and South Korea’s KOSPI Index is trading 2150.44, up 31.56 or 1.49%.

China’s Shanghai Index is at 2757.72, up 11.11 or +0.40% and Australia’s S&P/ASX 200 Index is trading 6958.00, up 34.70 or +0.50%.

On Monday, the major Asian indexes sank to their lowest in seven weeks on fears the coronavirus epidemic would hit demand in China. Aiming to head off any panic, the Chinese government took steps to shore up an economy hit by travel curbs and business shut-downs because of the virus.

Despite the support from the central bank and the government, Chinese shares were deep in the red, with the blue-chip index stumbling 7.8% to a 4-1/2 month trough. The benchmark Shanghai Composite Index lost $420 billion of its value while the yuan opened at its weakest level in 2020, sliding past the symbolic 7-per-dollar level.

China Accuses US of Spreading Fear but…

Early Monday, China accused the United States of spreading fear by pulling its citizens out and severely restricting travel.

“Washington has “unceasingly manufactured and spread panic,” Foreign Ministry spokeswoman Hua Chunying told reports, noting that the WHO had advised against trade and travel curbs.

“It is precisely developed countries like the United States with strong epidemic prevention capabilities and facilities that have taken the lead in imposing excessive restrictions contrary to WHO recommendations,” she said.

Still Allowed US Health Experts into Country

Despite its complaints about the U.S. spreading fear, China, nonetheless, agree agreed to allow U.S. health experts into the country as part of a World Health Organization (WHO) effort to help fight the fast-spreading coronavirus, as the number of cases and deaths continued to mount.

The White House said on Monday China had accepted its offer to have U.S. experts as part of a WHO mission to study and help combat the virus that emerged in Hubei’s provincial capital of Wuhan.

This article was originally posted on FX Empire

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