INSUBCONTINENT EXCLUSIVE:
SINGAPORE: A mid-week rally in Asian share markets halted on Friday and oil prices steadied as the growing death toll and economic damage
from a new virus spreading from China curbed further gains.
The death toll in mainland China rose to 636, more than doubling in just under a
week, with the number of infections at 31,161.
One of the first Chinese doctors who raised the alarm about the coronavirus also died from
the illness at a Wuhan hospital in the early hours of Friday
He was 34.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.5% on Friday as the lingering anxiety over the virus
outbreak tempered the mood, though it is still up 3.2% for the week.
Japan's Nikkei and Korea's Kospi headed lower in morning trade, but
are on track for their best week of the year after earlier rises.
The rally in global stocks since Monday's wipeout of Chinese equities,
and the selldown in bonds, was underpinned by China's sweeping efforts to contain the spread of the virus.
Beijing has pumped billions of
dollars into the money market to stabilise market confidence and support its faltering economy
Thursday's news of Chinese tariff cuts on some United States goods had also fired up riskier assets.
But with the death toll rising,
cities shut off, flights cancelled and factories closed, global supply chains are in disarray and fears of a pandemic remain
Chinese stocks also sit well below
"The rate of infection is not slowing," said Michael McCarthy, chief markets strategist at brokerage CMC
Markets in Sydney.
"I'm a little surprised at the way European and United States investors have shrugged this off
I think the reaction in the Asia-Pacific region is much more reasonable
There is real uncertainty," he said.
In morning trade a slide in the safe-haven yen paused, leaving the currency sitting by a two-week low
at 109.98 per dollar and poised for its worst weekly loss since last October.
Gains in the Australian dollar, a liquid proxy for China
because of the heavy exposure of Australian exports, were likewise halted
It is on track for its first weekly rise this year
Gold hovered at $1,565.76 per ounce.
Chinese goods trade figures due during the morning will be closely watched for an early glimpse of how
the virus, and the harsh measures to contain it, are affecting the flow of goods.
COMMODS CAUTIOUSMuch is unknown about the conronavirus,
including its lethality and transmission routes
The World Health Organization has said it is too early to call a peak in the outbreak.
Yet China's aggressive response, dubbed a "people's
war for epidemic prevention" by President Xi Jinping, appears to have inspired confidence.
Overnight, bonds were sold and markets rallied
from Frankfurt to New York
United States stocks gained for a fourth straight session and Wall Street's main indexes hit record highs
The S-P 500 rose 0.3%.
Owing to much greater exposure to Chinese demand and less access to the benefits of monetary stimulus, commodity
prices have been much more sensitive to conditions on the ground.
Oil and metal prices fell hard as the coronavirus outbreak gained pace and
have been slow to recover.
United States crude was firm on Friday at 51.37 per barrel, but is flat for the week and remains 13% below its
Brent prices settled at $55.12 per barrel.
A rally in copper - often seen as a barometer of global economic health because of its wide
industrial use - ran out of steam on Thursday and closed flat in London at $5,735-a-tonne .
"We think that demand could come back strongly
as opposed to gradually in Q2 2020," said Commonwealth Bank commodities analyst Vivek Dhar.
"But the risk in the near term is that provinces
take longer to return to work in order to contain the spread of the virus."