Asian Shares Higher Wednesday 01/22 05:56
Shares were mostly higher in Asia on Wednesday after U.S. stocks tumbled
overnight as a virus outbreak in China rattled global markets.
BANGKOK (AP) -- Shares were mostly higher in Asia on Wednesday after U.S.
stocks tumbled overnight as a virus outbreak in China rattled global markets.
Japan's Nikkei 225 index climbed 0.7% to 24,031.35 and the Kospi in South
Korea surged 1.2% to 2,267.25. In Hong Kong, the Hang Seng jumped 1.3% to
28,355.10. The S&P ASX/200 in Sydney gained 0.9% to 7,134.60. The Shanghai
Composite index recovered from early losses, picking up 0.2% to 3,060.75.
India's Sensex lost 0.3% to 41,218.64. Shares fell in Malaysia but rose in
Singapore and Indonesia.
There was little regional news apart from the virus to drive trading, though
South Korea reported better than expected economic growth in the last quarter
of 2019. Its GDP rose 1.2% from the previous quarter, an improvement on the
previous quarter's 0.4% growth. Economists attributed the stronger growth to
increased government spending, reduced trade friction and a recovery in demand
"It continues a noticeable trend of improving data in Asia over the past few
months, which does imply a recovery is underway," Jeffrey Halley of Oanda said
in a commentary. However, he noted that a "soft underbelly" of risk remains, as
evidenced by the worldwide retreat in financial markets Tuesday on news the new
coronavirus can be spread between humans, not just between animals and humans
as earlier suspected.
On Wednesday, Chinese authorities reported the number of people confirmed
infected by the virus first reported in the central Chinese city of Wuhan had
risen to 440, with nine deaths. One case has been reported in the U.S.
Wall Street's overnight selloff snapped a three-day winning streak by the
S&P 500. Investors worry that the new coronavirus spreading in the world's
second-largest economy could hurt tourism and ultimately economic growth and
The outbreak has coincided with the peak travel season in China for the
Lunar New Year festival, and stocks of U.S. companies that cater to Chinese
tourists had some of the biggest losses, along with general travel companies,
such as casinos and airlines. Along with banks, industrial and energy stocks
accounted for a big share of the selling. Those losses outweighed gains in real
estate stocks, utilities and household goods makers. Traders also shifted money
into U.S. government bonds, sending yields lower.
"From an investment standpoint, the risk with any virus is in the scope of
its economic impact, and the mere fact that this has spread from China
overnight to the U.S. so quickly reinforces the idea that the negative fallout
could be global rather than local," said Alec Young, managing director of
Global Markets Research for FTSE Russell.
Las Vegas Sands fell 5.4% and Wynn Resorts tumbled 6.1% for two of the
largest losses in the S&P 500. Both casino companies get most of their revenue
from Macau on China's southern coast. Other travel companies also slumped on
worries that customers may stay away due to virus fears. Royal Caribbean
Cruises fell 4%, United Airlines lost 4.4%, and Booking Holdings dropped 3.1%.
The S&P 500 fell 0.3% to 3,320.79. It had fallen as much as 0.4% earlier in
the day. The Dow Jones Industrial Average lost 0.5%, to 29,196.04. The Nasdaq
composite slid 0.2%, to 9,370.81. Smaller-company stocks took the brunt of the
selling. The Russell 2000 index lost 0.8%, to 1,685.90.
Boeing shares slid 3.3% after the aircraft manufacturer said that it doesn't
expect federal regulators to approve changes to the grounded 737 Max until this
summer --- several months longer than the company was saying just a few weeks
U.S. companies are in the midst of reporting their earnings results for the
last three months of 2019, and early indications are encouraging. Less than a
tenth of S&P 500 companies have reported their results so far, but of them, 72%
topped analysts' forecasts for profits. Those forecasts were low, to be sure,
with analysts saying S&P 500 profits fell last quarter for the fourth
consecutive time, according to FactSet.
Benchmark U.S. crude fell 33 cents to $58.05 per barrel in electronic
trading on the New York Mercantile Exchange. It dropped 20 cents on Tuesday to
settle at $58.38 a barrel. Brent crude, the international standard, gave up 30
cents to $64.29 per barrel. Overnight, it lost 61 cents to close at $64.59 a
Gold fell $4.60 per ounce to $1,553.30. Silver fell 5 cents to $17.76 per
ounce and copper fell 5 cents to $2.80 per pound.
The dollar rose to 109.99 Japanese yen from 109.86 yen on Tuesday. The euro
slipped to $1.1081 from $1.1084.