Asian markets fall as investors take stock of the outbreak.
Asian stocks were mostly lower on Wednesday, as investors paused after a two-day rally to assess the world’s response to the coronavirus outbreak.
Stocks in Japan climbed by midday, but markets in China, Hong Kong, South Korea and Australia fell slightly. Futures for American and European markets suggested mixed openings.
Investors had, over the past two days, found solace in signs that the outbreak is peaking in some of the hardest-hit parts of the United States and Europe. On Wednesday China lifted its lockdown on the city of Wuhan, where the virus first emerged, in another sign of progress.
But markets remain fragile. Japan and South Korea this week joined other countries preparing big economic rescue packages. Still, the freeze on economic activity from virus containment efforts could have a negative impact for months and years and require even more economic stimulus actions by world leaders.
Reflecting that skepticism, prices for U.S. Treasury bonds, a traditional investment safe haven, were largely higher in Asia trading on Wednesday. On the positive side, oil prices rose on futures markets, in part on hopes that major producing countries like Russia and Saudi Arabia could put aside their differences.
In Japan, the Nikkei 225 index was up 1.1 percent. In mainland China, the Shanghai Composite index was down 0.3 percent. Hong Kong’s Hang Seng Index was down 1 percent. South Korea’s Kospi was down 0.4 percent.
South Korea boosts stimulus measures to help exporters.
South Korea announced a new 36 trillion won — or $29.5 billion — stimulus package on Wednesday aimed at cushioning its export-driven economy from the impact of the coronavirus pandemic.
The new package added to a series of economic rescue measures totaling more than $80 billion that South Korea has announced in recent weeks to shore up its battered economy and help self-employed people and small- and medium-size businesses that have been hit the hardest.
The package announced on Wednesday will come in the form of cheap loans for the country’s exporters.
During an emergency meeting of senior economic policymakers, President Moon Jae-in said his government had also drawn up new measures worth 17.7 trillion won, or about $14.5 billion, to boost domestic consumption. He didn’t provide details.
“The global economy is being sucked into a severe depression and, as a result, our economy, heavily dependent on the external conditions, is facing a tsunami-like shock,” Mr. Moon said. “This is a tunnel, the end of which we cannot see yet.”
Mr. Moon revealed the new stimulus package as political parties in South Korea were campaigning for a crucial parliamentary poll next Wednesday. His governing Democratic Party had once appeared to face a tough campaign as Mr. Moon’s diplomacy with North Korea remained in a stalemate and discontent over a slowing economy deepened.
But the approval ratings of Mr. Moon and his party have been on the rise in recent weeks as South Korea was praised by other nations for its effective handling of the epidemic.
South Korea has aggressively deployed test kits and other disease-control resources to isolate patients and contain the virus. The number of new cases, once as high as 813 on Feb. 29, has dropped to around 50 in the past three days. The country had recorded a total of 10,384 coronavirus cases as of midnight Tuesday, with 200 deaths.
U.S. stocks ended slightly lower on Tuesday after an early rally faded late in the day.
The S&P 500 fell 0.2 percent at the close of trading. Earlier, stocks had been more than 3 percent higher as investors took heart in continued signs that the coronavirus outbreak may be peaking in a number of hard-hit places.
The decline came as benchmark U.S. crude oil fell 9.4 percent on Tuesday, after having climbed earlier in the day, trimming gains in shares of major oil producers. Oil prices have plunged by more than half since most state governments ordered people to stay home.
Stocks have been on a fairly strong, even if disjointed, run over the past two weeks. Initially fueled by Washington’s $2 trillion effort to counter the economic effect of the pandemic, the rally took on a more hopeful tone on Monday — reflecting glimmers of progress in the fight against the virus’s spread in the United States and Europe.
Through Tuesday, the S&P 500 is up nearly 19 percent from its March 23 low. (It’s still more than 21 percent below its high, reached on Feb. 19.)
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