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Asian stocks recover losses amid hopes of further liquidity infusion

  • Expectations of coordinated monetary policy actions help Asian equities to pare losses.
  • Coronavirus fears loom, China’s PMIs drop to the record lows.
  • Ex-China government measures, COVID-19 statistics will be the key to watch.

Having renewed fears of the 2008 global financial crisis (GFC) during Friday, Asian shares are on their recovery mode ahead of the European on Monday. While portraying that, the MSCI index of Asia-Pacific shares (outside Japan) marks 1.17% gains whereas Japan’s NIKKEI is up 0.90% to 21,357 by the press time.

While fears of the coronavirus outbreak ex-China continue to loom, share traders might have taken clues from the expectations that global policymakers will roll out coordinated actions to safeguard against the contagion.

Providing strong clues were Friday’s comments from the Fed Chair Jerome Powell as well as the latest statement from the BoJ Governor Haruhiko Kuroda. The news was also circulated by Bloomberg that China will allow a delay of bad loan recognition to help the small and medium-sized businesses affected due to the deadly coronavirus.

That said, the US 10-year treasury yields stay sluggish around 1.09% whereas S&P 500 Futures rises 0.66% to 2,969 by the press time.

It should also be noted that the early-day releases of February month PMI numbers from the Philippines, Indonesia, South Korea, Malaysia, China and Thailand registered mixed readings whereas the former two bucked the bearish trend.  The Philippines’ PSEi Composite marking 0.75% gains to 6,838 while Indonesia’s IDEX Composite drops 1.02% as upbeat Indonesia CPI detailed expectations of further rate cuts from the Bank Indonesia (BI).

Chinese stocks seem to lead the recovery with nearly 3.0% advances by each benchmark whereas shares in India mark near 1.5% profits. However, investors in Australia and New Zealand still fear of any recovery as their share benchmarks keep losses by the time of writing.

Despite the latest recovery in global shares, the prevailing risk of coronavirus continues to challenge the equity bulls.

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