Asian stocks followed Wall Street higher Tuesday as China’s factories struggled to re-open after an extended holiday break. However, industry analysts warned investors might be underestimating how economically damaging the challenge was likely to be.
The deaths from the coronavirus outbreak in mainland China crosses 1,000 mark Tuesday, although the variety of new confirmed cases dropped.
Traders appeared to be hoping for the best, and MSCI’s broadest index of Asia-Pacific shares outside Japan soared 0.9%, with Shanghai blue chips ahead by 0.8%.
Japan’s Nikkei was shut for a holiday, though Nikkei futures floated 0.8% firmer. Futures for the EUROSTOXX 50 climbed 0.7% and the FTSE 0.5%.
E-Mini futures for the S&P 500 contributed 0.3% after a late bounce Monday took Wall Street to record peaks.
The Dow settled up 0.6%, while the S&P 500 earned 0.73% and the Nasdaq 1.13%.
The gains came even as WHO warned the spread of the virus among individuals who had not been to China might be “the spark that becomes an even bigger fire.”
In China, factories had been retarded in reopening after an extended Lunar New Year holiday break, analysts at JPMorgan to once again downgrade estimations for development this quarter.
They assumed the virus would peak in March and factories would slowly reopen this month. In this case, progress would brake sharply to around a 1% annualized pace in Q1, before leaping to 9.3% in the second.
Should the virus not peak until April, the economic system may shrink in Q1, with a rebound spread over Q2 and Q3, the JPMorgan analysts stated.