SYDNEY- Asian share markets followed Wall Street higher even as doubts grew about how quickly China’s factories could get back to work given that the coronavirus continues to spread and deaths mount.
The total number of deaths in China has topped 1,000, well past the toll from Severe Acute Respiratory Syndrome, which killed nearly 800 worldwide.
Investors seemed to be hoping for the best, though. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.9 percent, while Shanghai blue chips rallied 1 percent.
Japan’s Nikkei was closed for a holiday, although Nikkei futures traded 0.7 percent firmer. Futures for the EUROSTOXX 50 rose 0.7 percent and the FTSE 0.6 percent.
E-Mini futures for the S&P 500 added 0.3 percent, after a late jump took Wall Street to fresh record highs on Monday. The Dow ended up 0.6 percent, the S&P 500 gained 0.73 percent and the Nasdaq 1.13 percent.
The gains came even as the World Health Organization (WHO) warned the spread of coronavirus among people who had not been to China could be “the spark that becomes a bigger fire”.
In China, factories were slow in re-opening after an extended Lunar New Year break, leading analysts at JPMorgan to again downgrade forecasts for growth this quarter.
“The coronavirus outbreak completely changed the dynamics of the Chinese economy,” they said in a note.
They assumed the contagion would peak in March and factories would slowly resume opening this month. In this case, growth would brake sharply to around a 1 percent annualized pace in the first quarter, before rebounding to 9.3 percent in the second.
Should the contagion not peak until April, growth could turn negative in the first quarter, with a rebound spread over the second and third quarters, the JPMorgan analysts said. — Reuters
