Asian stocks eased and currency markets were skittish on Thursday, as coronavirus cases rose in South Korea and Japan even as China added more stimulus through a rate cut to support its economy.
China reported a large drop in new cases but that came together with a jump in infections in South Korea, two apparent deaths in Japan and researchers finding that the virus spreads more easily than previously believed
According to Reuters, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.6 per cent, led by falls of 0.8 per cent on Hong Kong’s Hang Seng and South Korea’s KOSPI.
E-mini futures for the S&P 500 traded 0.2 per cent softer while bonds firmed slightly and the US dollar rose.
“I think there’s a realisation that before we get all the stimulus measures that people have been frothing about, you’ve got to deal with a lot of companies that are finding themselves with impairment charges or indeed solvency problems,” said Sean Darby, global equity strategist at Jefferies in Hong Kong.
“Markets have taken a step back because the authorities won’t do any major stimulus until they are completely sure the virus has stopped, because there’s no point in doing it when people are sitting at home.”
China cut its benchmark lending rate earlier on Thursday, as anticipated, adding to a slew of measures in recent weeks aimed at cushioning the virus’ impact on the economy.
That kept Chinese stocks supported, while Japan’s Nikkei advanced one per cent as an overnight slide in the yen is a boon for exporters, though the mood was more nervous elsewhere.
China had 394 new cases on Wednesday, the lowest since Jan. 23. More than 2,100 people have died from the coronavirus in China, with eight deaths in other countries but not including the two from the quarantined cruise ship in Japan.
