Slowing virus, China stimulus hopes support stocks, yen nurses losses

By Tom Westbrook SINGAPORE (Reuters) - Asian stocks edged up on Thursday, supported by a fall in coronavirus cases and expectations of more Chinese stimulus to offset the economic impact of the epidemic, while the Japanese yen nursed heavy losses after suffering its steepest drop in six months. The epicentre of the outbreak in China's Hubei reported just 349 new cases on Thursday, the lowest since Jan. 25, although it was accompanied by a change in diagnosis rules

Reuters February 20, 2020 07:05:18 IST
Slowing virus, China stimulus hopes support stocks, yen nurses losses

Slowing virus China stimulus hopes support stocks yen nurses losses

By Tom Westbrook

SINGAPORE (Reuters) - Asian stocks edged up on Thursday, supported by a fall in coronavirus cases and expectations of more Chinese stimulus to offset the economic impact of the epidemic, while the Japanese yen nursed heavy losses after suffering its steepest drop in six months.

The epicentre of the outbreak in China's Hubei reported just 349 new cases on Thursday, the lowest since Jan. 25, although it was accompanied by a change in diagnosis rules.

China is widely expected to cut its benchmark lending rate on Thursday, adding to a slew of fiscal and monetary measures in recent weeks aimed at cushioning the virus' impact on the economy.

China also plans to take over HNA Group and sell off its airline assets, Bloomberg reported on Wednesday, citing people familiar with the matter.

MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> ticked up 0.1%.

Buoyed by the cheaper yen, Japan's Nikkei <.N225> rallied 1.5%. Markets in Australia and New Zealand minted record highs <.AXJO> <.NZ50>.

"The lowering of interest rates, cutting of corporate tax rates, increasing money supply...these are all seen as very strong responses" from China, said Michael McCarthy, chief market strategist at CMC Markets in Sydney.

The prospect of central bank support and easier money also underpinned bonds, with U.S. Treasury yields steady, with benchmark 10-year yields last at 1.5815% .

Overnight pan-regional STOXX 600 index <.STOXX> in Europe rose 0.8% to a record high. The Dow Jones <.DJI>, S&P 500 <.SPX> and Nasdaq <.IXIC> all gained. [.EU][.N]

More than 2,100 people have died from the coronavirus in China, spreading to more than two dozen countries, and governments around the world are trying to prevent it from becoming a global pandemic.

YEN TUMBLES

The most dramatic move overnight was a steep drop in the Japanese yen, which posted its sharpest fall against the dollar in half a year, even as safe-haven assets such as gold traded firmer.

Selling was broad and sustained through the session.

The yen fell nearly 1.4% against the dollar and the kiwi and almost 2% against the Norwegian krone - its sharpest daily drop against the krone in almost three years .

"It is rare to see USD/JPY and gold ripping at the same time, but the simple explanation is that the world is awash in a flood of money and there are not many attractive places to park that excess liquidity," said Brent Donnelly, Spot FX Trader at HSBC.

The yen recouped some of those losses in morning trade, to rise 0.2% to 111.17 per dollar.

Elsewhere oil prices held overnight gains, while gold gave some of its rise back.

U.S. crude last sat 30 cents firmer at $53.60 per barrel and Brent settled at $59.12 . Gold last traded at $1,609.33 per ounce .

(Editing by Shri Navaratnam)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.