By Administrator_India,
Asian shares reversed earlier losses on Monday and moved back toward a three-week top as Chinese efforts to cushion the blow from a coronavirus outbreak cheered investors, although Japanese stocks faltered amid growing recession risks.
Trading is expected to be light as U.S. stocks and bond markets will be shut on Monday for a public holiday.
The gains were helped largely by Chinese shares with the blue-chip index .CSI300 adding 0.4% after the country’s central bank lowered one of its key interest rates and injected more liquidity into the system.
Also whetting risk appetite was an announcement by China’s Finance Minister on Sunday that Beijing would roll out targeted and phased tax and fee cuts.
Fears about the jolt to the world economy from the coronavirus still lingered though as the number of reported new cases in China rose to 2,048 as on Sunday from 2,009 the previous day.
Restrictions were tightened further in Hubei on Sunday with most vehicles banned from the roads and companies told to stay shut until further notice.
China’s “containment measures suggest that activity is only likely to normalise by mid-March at best and more likely end Q1,” said Jefferies analyst Sean Darby.
“The question remains over the degree of stimulus to be required given the country’s fiscal position.”
Japan’s Nikkei .N225 stumbled 0.7% after the country’s economy shrank at the fastest pace in the December quarter since the second quarter of 2014.
The hit to the world’s third-largest economy comes amid fresh concerns about weakness in the current quarter, as the coronavirus damages output and tourism, stoking fears Japan may be on the cusp of a recession.
Trade-dependent Singapore downgraded its 2020 economic growth forecast due to the coronavirus, while China’s economy is also widely expected to take a sharp hit.