Logo of Phnom Penh Post newspaper Phnom Penh Post - Asian markets back up on high hopes for limited virus impact

Asian markets back up on high hopes for limited virus impact

Asian markets back up on high hopes for limited virus impact

Asian markets rebounded on Wednesday as hopes the deadly new coronavirus will have only a short-term impact on corporate earnings and economic growth prevailed.

Falls on US and European markets – after Apple’s warning that it would miss its quarterly revenue forecast due to the epidemic – did not carry over to Asia as investors bet on policymakers doing what is needed to minimise the fallout.

The illness has disrupted supply chains and forced the cancellation of high-profile sporting and cultural events.

As stimulus measures are rolled out in China and elsewhere, “Asia seems confident that the region’s governments will ‘do what it takes’ to offset the coronavirus slowdown”, Jeffrey Halley, senior market analyst for Asia at Oanda, said in a commentary.

After four straight sessions in the red, Tokyo’s benchmark Nikkei 225 index closed up 0.9 per cent.

Hong Kong put on 0.5 per cent but mainland China’s key Shanghai Composite Index was off 0.3 per cent.

Elsewhere, South Korea rose 0.1 per cent even as the number of confirmed cases of the virus jumped by nearly two-thirds.

Taipei gained 0.9 per cent and Sydney put on 0.4 per cent. The Cambodia Securities Exchange sank 2.09 per cent.

The more sanguine mood came as Chinese officials released a study showing most patients have mild cases of the coronavirus, and World Health Organisation officials said the mortality rate was relatively low.

IMF chief Kristalina Georgieva has said there could be a cut of around 0.1-0.2 percentage points to global growth but stressed there was much uncertainty about the virus’s economic impact.

Anne Anderson of UBS Asset Management in Sydney played down concerns.

“It’s important to contextualise the impact of the virus – we’re not expecting a permanent cut in global growth,” Anderson told Bloomberg TV.

“The combination of the fiscal-monetary and the belief that we will transition through this over the coming months mean we’re still on steady footing.”

The optimism flowed into European markets, with the major bourses opening higher.

London’s FTSE 100 was up 0.6 per cent, the Paris CAC added 0.3 per cent and Germany’s DAX put on 0.4 per cent.

Apple’s announcement that it would miss its March quarter revenue forecast while global iPhone supplies would fall jolted markets and sparked renewed demand for safe-haven assets such as gold.

Not everyone is convinced the economic impact will be fleeting, however, suggesting Wednesday’s gains could be temporary.

“The debate on whether [Covid-19] is a transient economic shock or worryingly a more longer-lasting global economic headwind appears to be shifting in favour of the latter following Apple’s admission,” said Rodrigo Catril of National Australia Bank.

China is the world’s biggest importer and consumer of oil, and crude prices have been particularly sensitive to the epidemic that has spread to nearly 30 countries and territories.

Brent Crude was up 0.8 per cent and West Texas Intermediate was 0.9 per cent higher.


  • Seven positive for Covid-19, Hun Sen confirms local transmission

    Prime Minister Hun Sen announced that there has been local community transmission of Covid-19. However, he urged the people not to panic even though the Ministry of Health announced the discovery of seven new cases on Sunday. Among the victims are Chhem Savuth, the director-general

  • PM confirms community transmission, calls for unity

    Prime Minister Hun Sen has called on the public to stay calm, unite and follow the Ministry of Health guidelines after the wife of a senior official tested positive for Covid-19 in the Kingdom’s first case of community transmission. The case has drawn criticism

  • Over 110 garment factories close

    A government official said on November 22 that at least 110 garment factories had closed in the first nine months of the year and left more than 55,000 workers without jobs – but union leaders worry those numbers could be much higher. Ministry of Labour and Vocational Training undersecretary

  • Singapore group seeks $14M in damages from PPSP over ‘breach of contract’

    Singapore-based Asiatic Group (Holdings) Ltd is seeking a minimum of $14.4 million relief from Cambodia Securities Exchange (CSX)-listed Phnom Penh Special Economic Zone Plc (PPSP) for allegedly breaching a power plant joint venture (JV) agreement. Asiatic Group’s wholly-owned Colben System Pte Ltd and 95 per

  • PM vows to protect Hun family

    Prime Minister Hun Sen has vowed to continue his fight against opposition politicians who he said intend to smash the Hun family. Without naming the politicians but apparently referring to former leaders of the Supreme Court-dissolved Cambodia National Rescue Party (CNRP), Hun Sen said there

  • Cambodia lauded for fight against Covid-19

    Cambodia has drawn global accolades for its handling of the Covid-19 pandemic, with a new report finding that the Kingdom has controlled the pandemic better than any other country in Asia. Dr Takeshi Kasai, director of the World Health Organisation’s (WHO) Western Pacific region,