Asian Shares Mostly Higher; Hang Seng Plunges as Travel-Related Stocks Tumble
Most major stock indexes in the Asia Pacific region finished higher on Wednesday following a steep sell-off in the previous session. However, gains were limited because of worries over the rapid spread of the coronavirus in China and its potential economic impact.
Asian shares tracked higher earlier in the session, following Wall Street’s gains and after the World Health Organization (WHO) expressed confidence in China’s ability to contain the spread of the virus.
On Wednesday, Japan’s Nikkei 225 Index settled at 23379.40, up 163.69 or +0.71%. South Korea’s KOSPI Index finished at 2185.28, up 8.56 or +0.39% and Hong Kong’s Hang Seng Index closed at 27160.63, down 789.01 or -2.82%. The Hong Kong exchange had been closed for several days due to the Lunar New Year celebration so today’s session represented the first response to the coronavirus outbreak.
In Australia, the S&P/ASX 200 Index finished at 7031.50, up 37.00 or +0.53%. China remained closed for a holiday.
Hong Kong Shares Plunge
The Hang Seng Index plunged on Wednesday as investors caught up to the rest of the world swiftly after being closed for several days due to the Lunar New Year holiday.
Wednesday’s losses were concentrated in the travel-related sector, but life insurance and gaming stocks also took a big hit.
The move follows Saturday’s declaration by Hong Kong leader Carrie Lam of a virus emergency in the city of 7.3 million, extending school cancellations until February 17 and canceling all official visits to mainland China.
Apple Suppliers Affected by Coronavirus Outbreak
Shares of Apple suppliers were mixed on Wednesday after Apple CEO Tim Cook said Tuesday that the Cupertino-based tech giant’s operations in China are being impacted by the ongoing coronavirus outbreak in the country.
Late Tuesday, Apple CEO said the firm has restricted employee travel and shut one store in China due to the coronavirus outbreak, also adding that the company is cutting back on retail sale store hours in China. This followed the announcement that Apple reported earnings and iPhone sales that smashed expectations.
Australian Shares Rise; Gains Limited by Firm Inflation Data
Australian shares rebounded on Wednesday as global markets recovered from a sell-off sparked by concerns over the deadly coronavirus outbreak.
“There’s been a bit of a relief rally,” said BetaShares chief economist David Bassanese. “Obviously it’s going to be volatile. Markets could just as easily give it up tomorrow given how the virus plays out.”
Lingering hopes that the Reserve Bank of Australia (RBA) would cut the cash rate next Tuesday – which would likely drive shares higher – may have been extinguished on Wednesday when the Australian Bureau of Statistics announced that inflation grew just 1.8 percent in the December quarter, below the RBA’s target of two to three percent.
On Tuesday the ASX’s Rate Indicator showed the market was pricing in just a 30 percent chance of a rate cut to 0.5 percent, down from a 56 percent chance two weeks ago.
This article was originally posted on FX Empire
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Asian Shares Mostly Higher; Hang Seng Plunges as Travel-Related Stocks Tumble
