TOKYO, Feb 5 — Asian stocks steadied today as Chinese shares moved higher on hopes of additional stimulus to cushion the economic blow from a coronavirus outbreak, but risks remain as the illness continued to spread and the death toll neared 500.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.6 per cent.

Shares in China rose 1.66 per cent while stocks in Hong Kong climbed 0.52 per cent.

Oil prices bounced by around 1 per cent on hopes for more output cuts from Opec and its allies but sentiment remained weak on worries about a long-term dent in demand for energy and other commodities.

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The onshore yuan was little changed versus the dollar, highlighting the cautious mood as investors monitor the impact of the virus.

Euro Stoxx 50 futures were down 0.19 per cent, German DAX futures were down 0.04 per cent, while FTSE futures were down 0.29 per cent in a sign European equities are poised for a cautious start to trading.

China and other countries have imposed travel restrictions to try to contain a new virus that emerged in the central Chinese city of Wuhan late last year, slamming the breaks on manufacturing and tourism in the world's second-largest economy.

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Many investors argue that any slowdown will be temporary and that Chinese policy steps are reason to remain optimistic about the growth outlook, but so far public health officials have not found a way to stop the spread of the virus both inside and outside of China.

“We're going to have a strong day in Asia, but whether this is the reversal of a downtrend remains to be seen,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney.

“Oil investors remain pessimistic about demand disruptions, but equity investors, especially overseas, are discounting the impact of the virus.”

Australian shares rose 0.45 per cent, buoyed by gains in the mining sector. Japan's Nikkei stock index rose 1.42 per cent, supported by shares of industrial equipment makers.

US stock futures fell 0.12 per cent in Asia today. The S&P 500 rose 1.5 per cent yesterday and the tech-heavy Nasdaq rose to a record high.

The People's Bank of China (PBOC) is likely to lower its key lending rate — the loan prime rate — on February 20, and cut banks' reserve requirement ratios in the coming weeks, policy sources told Reuters.

The PBOC has already pumped hundreds of billions of dollars into the financial system this week to keep rates from rising and restore confidence. This helped Chinese stocks stabilise yesterday following a rout that wiped out around US$700 billion (RM2.88 trillion) in market capitalisation on Monday when Chinese markets opened after an extended holiday.

The virus has already claimed nearly 500 lives. Japan's health minister said today 10 people on a cruise ship at the port of Yokohama have tested positive for the new virus.

US crude rose 1.09 per cent to US$50.15 a barrel, and Brent crude rose to 1.15 per cent to US$54.58 per barrel in recovery from declines yesterday.

Opec and its allies are considering cutting oil output by a further 500,000 barrels per day (bpd) due to the impact on oil demand from the virus, sources tell Reuters.

Brent futures have lost around 16 per cent since China confirmed on January 21 that human-to-human infection of the previously unknown virus is possible, which kicked off a rout in global markets as the number of cases and the death toll rose.

In the onshore market, the yuan held steady at 7.0036 per US dollar after rising 0.3 per cent yesterday.

The yen traded at 109.48 per dollar, close to the lowest in almost a week. The Swiss franc held steady at 0.9698 versus the dollar following a 0.3 per cent decline yesterday.

Benchmark 10-year Treasury yields eased slightly to 1.5940 per cent as some investors sought the safety of government debt. — Reuters