Reuters Insider - Asia Insight: Asian markets stem losses as China returns to work, but sentiment jittery
10/02/2020 08:31
Click the following link to watch video: https://share.insider.thomsonreuters.com/link?entryId=1_qu8ag195&referenceId=1_qu8ag195&pageId=ReutersNews Source: Reuters Insider Description: Asian shares pared early losses as Chinese authorities lifted some coronavirus-related restrictions on work and travel, although overall sentiment remains jittery as the death toll from the epidemic climbs to at least 910.. Short Link: Video Transcript: Hello and welcome to your Asia Insight. I am Angeline Ong. Workers across China have been trickling back to work after the extended Lunar New Year holiday. The death toll from the Coronavirus has now surpassed the SARS epidemic of 2002 to 2003. 97 were recorded on Sunday, taking the total to at least 910. Now, there’ve been two deaths outside China – in Hong Kong and the Philippines, both Chinese nationals. The World Health Organization says there is a chronic shortage of protective equipment in the fight against the spread of the virus. The world is facing chronic shortage of personal protective equipment, as you might imagine. I will be speaking to the pandemic supply chain network to identify the bottlenecks and find solutions and push with fairness in distribution of equipments. Japanese media says 16 more cases of the virus have been confirmed on a cruise ship docked in Yokohama. It takes the number of cases on board the Diamond Princess to 130. Passengers have been allowed on deck in shifts to get fresh air, now being encouraged to take their temperatures regularly. Now, let’s get a check of the markets for you. Asian shares pared early losses although overall sentiment was still jittery. James McGlew, an analyst at stock broker Argonaut says, “Overall, I think there is still a concern out there, but the impact has not been fully quantifiedâ€. Today’s easing of restrictions seems to be more of a symbolic gesture rather than the government actually being on top of the situation. Chinese state media says the government pumped $129 billion into the financial system today. It says the money has gone in via reverse repos. Several other central banks have said they’ll do whatever it takes to minimize the risk to their economies from the virus, but many analysts say their ability to intercede is limited. Unfortunately of course having gone through QE, to try and make sure that we rescue the global economy and see it grow again, which we did, it was successful, could we actually afford QE2 which is in effect what you’re talking about now, putting money in again? Well, I’m afraid they don’t have the depth of the resources. Also, what power could these banks actually have? Cutting rates, there will always be a rock pattern anyway. And frankly when you’re talking about rate cut at a time like this, it’s not going to have much impact. What they can do though is show confidence in terms of making sure that actual trade operations are maintained in terms of making sure that the borders are properly open or be it with control in terms of health control, to make sure there is enough confidence to say, we will stand behind the economy, don’t panic. Don’t ask too many questions because I’m not quite sure what else we’re going to do. Now, the impact of the epidemic means the next few weeks will be critical for carmakers. Parts made in China are used in millions of vehicles assembled around the globe. And Hubei Province, the epicenter of the outbreak, is a major hub for parts, production, and shipments. If plans remain idle heading into March, analysts at HIS Markit predict losses will add up to 1.7 million vehicles gone and made during the first quarter. Hyundai says the parts shortage could force it to suspend production in South Korea. -- says it’s looking at alternative sources of key parts, and GM says it has teams working around the clock to head off trouble. Now, oil prices edged down as traders assess the demand in China. Oil is off more than 20% from peaks struck in January. Avtar Sandu, Senior Commodities Manager at Phillip Futures in Singapore, says the oil roll sentiment is still bearish, but markets are oversold. Normally, it takes at least two quarters before things start to pick up. But there’s always hope that new stimulus in the market that will buoy the economy. Now a look at some other companies in the news. The Coronavirus has claimed its first big M&A deal. Macau casino operator Melco has pulled the plug on a stake purchase in Australia’s Crown Resorts, citing a plunge in traveler numbers and casino closures. The planned acquisition of a near 26% holding was valued at $1.2 billion when it was announced last May. Sources say Foxconn has been given permission to reopen its factory in Zhengzhou in the north of China. The iPhone-maker’s plans have been shut for the last two weeks because of the Coronavirus. Foxconn says it’s working with the authorities to reopen all its factories in the country. And Japan’s Nippon Steel is cutting nearly 10% of its production capacity. It’s been hit by falling demand at home and competition from China. The world’s third biggest steel-maker is setting aside $3.6 billion in charges from a closed three blast furnaces in Japan. And that’s it from your Asia Insight. Don’t forget you can watch more videos on Reuters.com. I’m Angeline Ong, and this is Reuters