Asian markets lose early puff as virus uncertainty casts a pall

A rally in equities and oil ran out of steam Wednesday as deadly coronavirus outbreak continues its rapid global spread and investors nervously await a US relief plan.

Markets showed signs of some much-needed stability at start of trade following two days of wild gyrations, thanks to a pledge by US President Donald Trump to unveil measures to counter effects of disease on world's biggest ecomy and key driver of global growth.

US markets had ended around five per cent higher on Tuesday after suffering ir worst day since 2008 meltdown and tracking a strong bounce across Asia.

Safe-haven assets including yen retreated, while yields on US Treasuries, which hit a record low on Monday, rose. But after showing some early promise, nerves set in and Asian shares fell into red, while yen resumed its gains against dollar.

Tokyo and Seoul ended more than two per cent down, while Shanghai finished 0.9 per cent lower and Hong Kong shed 0.7 per cent in late trade.

Sydney sank 3.6 per cent, putting it into a bear market -- a drop of at least 20 per cent from a recent high -- just two weeks after hitting a record.

index has several firms that rely on trade with China, while energy stocks have also been hammered by oil rout.

Singapore and Taipei each lost at least one percent. Bangkok, Wellington and Jakarta were also lower, though Manila and Mumbai eked out small gains.

Trump promised "major" ecomic measures to combat impact on US ecomy and held talks with Republican lawmakers, with an eye on a cut in payroll taxes as well as help for airlines, cruise industry and small businesses.

anuncement from president came as or governments pledge to act against outbreak.

Italy's leadership, which has put entire country in quarantine, is eyeing a USD 16 billion pack, while Japan has unveiled a multi-billion-dollar emergency pack.

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Australia and Canada are expected to unveil measures in coming days, while Bank of England slashed interest rates Wednesday, hours before government anunces a closely watched budget.

"Expectations for a 'major' fiscal stimulus pack by US government have underpinned sentiment -- even if volatility suggests market still needs a bit of coaxing," said AxiCorp's Stephen Innes.

"Indeed, investors were in desperate need of leadership from policymakers. Central banks can do ir bit, but in times of viral cataclysm, it's governments that must be seen as in charge of proceedings... Trump's actions evidenced how little it takes for markets to respond favourably."

But White House has yet to produce any concrete plans and observers warned about a possible sell-off should investors be left feeling short-changed.

"Having decided President Trump will save world... financial markets could be setting mselves up for a severe disappointment should promised fiscal goodies get bogged down on Capitol Hill," said OANDA's Jeffrey Halley in a te.

While leaders gear up to fight COVID-19, disease continues to wreak havoc across planet, killing more than 4,000 people and leaving close to 120,000 infected.

Crude prices edged up for a second day on policy response hopes but were well off gains of close to five percent seen in initial business.

commodity crashed by a third Monday in its worst day since 1991 Gulf War after Saudi Arabia cut crude prices in a production row with Russia, sparking fears of a war for market share.

On Wednesday, Saudi officials said output would be ramped up by one million barrels a day.

Crude had already been under pressure owing to worries about impact on demand from virus.

Support for oil also came from comments by Russian Energy Minister Alexander vak, who told state-run TV channel Rossiya24 that Moscow was open to cooperation with Riyadh and OPEC to address price crisis, saying: "I want to say doors aren't closed."

Analysts also said that signs of life returning to China's Hubei province -- centre of outbreak -- after weeks of quarantine were also helping beleaguered crude market.

Provincial officials said some firms in Wuhan were allowed to return to work, including those key to "global industrial chains".

Passenger flights, trains, cars, ships and city buses in middle- and low-risk areas -- moving within province and excluding Wuhan city -- will "gradually resume operations" as well, y said, without giving any timeframe. 

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