TOKYO- Asian stocks clocked in gains on Wednesday as Chinese stocks inched up brought by optimism of increased stimulus to reduce the economic affliction of coronavirus contagion. However, risks still linger as the virus continues to spread with the mortality rate growing up to 500.
MCSI’s broadest index of Asia-Pacific shares outside Japan acquired 0.36%.
The yuan made minimal gains against the dollar, indicating that market sentiment was still low as investors take stock from the impact of the novel coronavirus.
The safe-haven yen and Swiss franc stood strong against the dollar. Oil prices soared in Asian region as investors expected deeper oil reduction from OPEC and its associates. In line with this, overall market sentiment is still frail on concerns about long-term implications in energy demand and other goods.
China and other countries implemented travel bans with an intention of containing the virus that was believed to have originated from Wuhan City last year. This caused major delays and underperformance in China’s manufacturing and tourism sector.
Majority of investors stood firm that the slowdown won’t last long and that Chinese policy steps are enough reason for markets to stay upbeat about the growth forecast. However, public health officials still have no methods to stop the virus from spreading in and out of the world’s second largest economy.
“We’re going to have a strong day in Asia, but whether this is the reversal of a downtrend remains to be seen,” said Michael McCarthy of CMC Markets.
“Oil investors remain pessimistic about demand disruptions, but equity investors, especially overseas, are discounting the impact of the virus,” he added.