TOKYO- Asian shares erased earlier gains, swinging into negative territory as a spike in new Chinese virus cases sent Hong Kong stocks tumbling and fuelled fears about the economic impact of the outbreak.
MSCI’s broadest index of Asia-Pacific shares outside Japan skidded 0.52 percent. Hong Kong shares fell 2.8 percent on their first session after a two-and-a-half trading day break for Lunar New Year, led by declines in financial services, real estate, and consumer goods companies.
However, Australian shares rose 0.57 percent, while Japan’s Nikkei stock index advanced 0.4 percent, partly because investors in these markets have already had a chance to react to the virus outbreak, which has claimed more than 100 lives.
Oil futures built on gains in Asia after OPEC sources said the cartel wants to extend crude output cuts by three months to June, easing concern about excess supplies.
US Treasury yields remained higher and safe-haven currencies held steady in a sign of some calm in financial markets, but the focus remained squarely on the virus and how investors would re-price riskier assets.
“The next three to five days will be maximum selling pressure, because essentially markets had a benign view of the virus before the Lunar New Year,” said Sean Darby, global equity strategist at Jefferies in Hong Kong.
“Until the rate of cases starts to peak, markets are not likely to bounce.”
US stock futures rose 0.14 percent in Asia on Wednesday. The S&P 500 rose 1.01 percent on Tuesday, rebounding from its worst daily decline in four months on Monday, as shares of Apple Inc rose ahead of its fourth-quarter results.
After the market close, Apple reported better-than-expected profits for the fourth quarter and forecast revenue in the current quarter above Wall Street expectations, which lifted some Asian tech shares.
The yield on benchmark 10-year Treasury notes rose to 1.6666 percent versus a yield of 1.5821 percent on three-month Treasury bills in another sign that sentiment has stabilized. — Reuters
