Asian markets rise as coronavirus concerns ease

Markets in Asia-Pacific rose on Wednesday following another positive lead from Wall Street with investor sentiment mixed about the immediate and long-term impact of the coronavirus outbreak.

The virus, officially named COVID-19 on Tuesday, has spooked markets around the world, having killed more than 1,100 people and infected tens of thousands since it emerged in central China at the end of last year.

Tokyo's benchmark Nikkei 225 index closed 0.7 percent higher, while Shanghai ended the day up 0.9 percent. In afternoon trade elsewhere, Hong Kong put on 1.0 percent, Sydney gained 0.5 percent and Singapore rose 1.2 percent. Seoul, Taipei, and Wellington were also higher.

The positive morning following fresh record closes by the S&P 500 and the Nasdaq in New York on Tuesday. "Despite the doom and gloom being shown in the real economy, Asian equity markets are a sea of green today. COVID-19 fears have been shrugged off, with regional markets preferring to follow Wall Street's lead," said Jeffrey Halley, senior market analyst for Asia-Pacific at OANDA.

READ: Coronavirus Outbreak: Death Toll Reaches 1,110 In China With 1,638 New Confirmed Cases

"Unfortunately, seas of green are often associated with algal blooms, which tend to suffocate all life in the water within them. The rallies of the past two days should be approached with caution." Traders reacted positively to cautious comments from the US Federal Reserve Chairman Jerome Powell on the new coronavirus -- which has spread to more than two dozen countries and has been declared a global health emergency.

The Fed boss told Congress members on Tuesday that the central bank was closely monitoring the virus and that its impact could spill over to the world economy, but the assessment was not as gloomy as many had expected. China, the world's second-largest economy, is looking to recover momentum after authorities extended the Lunar New Year break in a bid to stop the spread of the virus.

But millions of people remain in lockdown in many cities, where transport has also been severely restricted -- disrupting supply chains for key industries, including smartphones and cars. There are expectations that Beijing will introduce major stimulus policies to offset the hit to the economy.

There are concerns about how that will impact not only China's overall economic growth, but also the bottom lines of many multinational firms. The production lines of major auto makers such as GM and Hyundai have already been disturbed, and there is fear that airlines and the hospitality and tourism sectors will also take a hit.

Many countries have imposed travel bans and quarantine requirements, and major carriers have suspended or dramatically cut back on flights to and from mainland China. Aviation consultancy Ascend by Cirium said this week that the impact on the industry could be worse than during the 2002-03 SARS outbreak.

After tumbling on fears of decreased demand from China, the world's largest importer and consumer of oil, crude prices continued their recovery. Both main contracts were up on Tuesday, with Brent Crude rising 1.8 percent and West Texas Intermediate gaining 1.3 percent.

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