Asian Shares Recover from Early Weakness; South Korean KOSPI Jumps on Surge in Government SpendingSeoul shares ended sharply higher after data showed South Korea’s government spending surge helped the economy post its fastest quarterly growth in more than two years.
The major Asia Pacific stock indexes recovered from a mixed opening to finish sharply higher for the session on Wednesday. The price action suggests investors are starting to downplay the impact of the coronavirus on the global economy.
Hong Kong shares put in an especially impressive performance after a downgrade by Moody’s on Tuesday drove stocks lower. Mainland Chinese stocks rebounded to close higher after dropping more than 1% in the morning.
On Wednesday, Japan’s Nikkei 225 Index settled at 24031.35, up 166.79 or +0.70%. Hong Kong’s Hang Seng Index finished at 28341.04, up 355.71 or +1.27% and South Korea’s KOSPI Index closed at 2267.25, up 27.56 or +1.23%.
China’s Shanghai Index settled at 3060.75, up 8.61 or +0.28% and Australia’s S&P/ASX 200 Index finished at 7132.70, up 66.40 or +0.94%.
Coronavirus Concerns Still a Source of Volatility
Public health officials have confirmed the first U.S. case of a mysterious coronavirus that has sickened hundreds of people in China, the Centers for Disease Control (CDC) and Prevention said Tuesday.
On Wednesday, Chinese officials confirmed that nine people died as of January 21.
Meanwhile, CDC officials said they continue to believe the risk of it spreading to the American public is “low.”
The World Health Organization is expected to convene a panel of experts in Geneva, Switzerland, on Wednesday to consider whether the illness should be a global health emergency.
The Asian stock markets recovered on Wednesday because China’s response to the virus outbreak tempered some fears of a global pandemic. China’s response and candor – in contrast to the initial cover-up of the SARS outbreak in 2002-03 – have helped reassure investors concerned about the possible global fallout.
China’s National Health Commission said on Wednesday there were 440 cases of the new virus, with nine deaths so far. Measures are now in place to minimize public gatherings in the most-affected regions.
Australian Shares Hit Record High Despite Lower Consumer Confidence
Australian markets rallied to reach fresh highs, driven by gains in financials. Airline stocks slipped, however, amid growing coronavirus fears, with Qantas Airways losing 2 percent.
Australia’s consumer confidence declined in January as devastating bushfires weighed on economic growth outlook, survey data from Westpac showed on Wednesday. The Westpac-Melbourne Institute Index of Consumer Sentiment declined 1.8 percent to 93.4 in January from 95.1 in December.
South Korean Stocks Up Sharply on Government Spending Surge
Seoul shares ended sharply higher after data showed South Korea’s government spending surge helped the economy post its fastest quarterly growth in more than two years.