Asian Shares Rise Ahead of Central Bankers’ Conference Call

The major Asia-Pacific stock indexes were mostly higher on Tuesday as expectations grew central banks will ease policies to cushion the economic impact from a fast-spreading coronavirus. Stocks were primarily guided by an overnight surge on Wall Street.

Global equity markets took a beating last week as fears mounted that the epidemic could develop into a pandemic and cause recession.

On Tuesday, Japan’s Nikkei 225 Index settled at 21082.73, down 261.35 or -1.22%. Hong Kong’s Hang Seng Index finished at 26284.82, down 6.86 or -0.03% and South Korea’s KOSPI Index closed at 2014.15, up 11.64 or +0.58%.

In China, the Shanghai Index settled at 2992.90, up 21.97 or +0.74% and Australia’s S&P/ASX 200 Index finished at 6435.70, up 44.20 or +0.69%.

Today’s rally helped the stock markets regain some lost ground after major central banks indicated readiness to roll out stimulus measures to help cushion the economic blow, with the Reserve Bank of Australia delivering a quarter-point cut early Tuesday.

Global investors now await a conference call of the Group of Seven finance ministers to discuss measures to deal with the economic impact.

Reserve Bank of Australia Cuts Benchmark Rate

The Reserve Bank of Australia (RBA) announced on Tuesday a cut in the cash rate by 25 basis points to 0.5%, a new record low.

“The coronavirus outbreak overseas is having a significant effect on the Australian economy at present, particularly in the education and travel sectors,” said RBA Governor Philip Lowe in a statement.

“The global outbreak of the coronavirus is expected to delay progress in Australia towards full employment and the inflation target. The Board therefore judged that it was appropriate to ease monetary policy further to provide additional support to employment and economic activity,” Lowe said.

Central Bankers to Hold Conference Call to Discuss Coordinated Response to Coronavirus

Global financial ministers and central bankers will hold a conference call on Tuesday to coordinate the financial and economic response to the coronavirus. The teleconference call will be led by Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell on Tuesday at 12:00 GMT, CNBC’s Steve Liesman reported. Representatives of the Group of Seven industrialized nations will attend the call.

Australian Shares Snap Seven-Day Losing Streak

The Australian share market snapped a seven-day losing streak in which it lost over $250 billion in value over fears from the coronavirus epidemic. However, gains were likely limited after the Reserve Bank of Australia only opted for a 25-basis point rate cut, rather than the double-size 50-point slash some were hoping for.

Looking forward, the Australian Bureau of Statistics is set to release fourth-quarter gross domestic product figures on Wednesday.