Mumbai: Indian stock markets are likely to be volatile on Wednesday, while Asian shares and US stock futures edged cautiously higher in early deals today as investors tried to shake off concerns over the coronavirus epidemic following a slight decline in the number of new cases.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.01%. Australian shares were up 0.14%, while Japan's Nikkei stock index rose 0.61%.
The euro languished at a three-year low versus the dollar as disappointing data from Germany, Europe's largest economy, has stoked fears that the Eurozone is more vulnerable to external shocks than previously thought.
The Treasury yield curve remained inverted on Wednesday as yields on three-month bills traded above yields on 10-year notes in a sign that some investors remain cautious about the outlook.
China, the world's second-largest economy, is still struggling to get its manufacturing sector back online after imposing stringent travel restrictions to contain a virus that emerged in the central Chinese province of Hubei late last year.
Many investors view Chinese data on the virus, dubbed SARS-CoV-2, with a great deal of scepticism, but there are hopes that officials will roll out more stimulus to support the world's second-largest economy.
US stock futures rose 0.24% in Asia on Wednesday. The S&P 500 had declined 0.29% on Tuesday after Apple Inc said it would miss sales targets because the virus in China is pressuring its supply chain.
Mainland China reported 1,749 new confirmed cases of coronavirus infections on Tuesday, the country's National Health Commission said on Wednesday, down from 1,886 cases a day earlier and the lowest since 29 January. Many investors remain concerned about China's reporting standards for the virus. In addition, the flu-like illness has already spread to 24 other countries.
The People's Bank of China cut interest rates on its medium-term lending on Monday, which is expected to pave the way for a reduction in the country's benchmark loan prime rate on Thursday, as policymakers try to ease financial strains caused by the virus.
Back home, finance minister Nirmala Sitharaman held wide-ranging talks with government secretaries and senior executives of various companies on Tuesday to assess the impact of the coronavirus epidemic on Indian businesses, even as US tech giant Apple said it won’t meet its revenue target for this quarter due to the impact of the disease. Sitharaman said she will chair a meeting of secretaries later on Wednesday to chart a course of action, which will be finalized after consulting the Prime Minister’s Office.
Vodafone Idea Ltd chairman Kumar Mangalam Birla met telecom secretary Anshu Prakash on Tuesday amid fears that the government may invoke the company’s bank guarantees, a move that may threaten the very survival of India’s second-largest telecom operator.
In the currency market, the euro traded at $1.0796, close to the lowest since April 2017. The common currency crashed through a closely watched support level at $1.08 on Wednesday after a survey showed a sharp deterioration in German investor sentiment due to the coronavirus.
In offshore trade, the yuan was quoted at 7.0064 per dollar, close to its lowest level in a week, as traders continued to ponder the economic impact of the virus.
The yield on three-month Treasury bills stood at 1.5765% in Asia on Wednesday, above the 10-year Treasury yield of 1.5593%.
A yield curve inverts when short-term yields trade above long-term yields and is often considered a sign of recession in the next year or two.
US crude rose 0.21% to $52.16 a barrel as a reduction in supply from Libya offset concern about weaker Chinese demand for commodities.
Expectations that Organization of the Petroleum Exporting Countries (OPEC) and allied producers including Russia will deepen output cuts should lend support to prices.
The group, known as OPEC+, will meet in Vienna on 6 March.
(Reuters contributed to the story)