Asian stocks struggle to cheer PBOC rate cut amid coronavirus fears

• Asian equities fail to hold onto the recovery gains following the latest coronavirus updates.
• Two deaths in Japan and rising cases in Singapore joined warnings from S&P and IMF to weigh on the risk-tone.
• PBOC announced a widely expected rate cut, Aussie employment data disappointed.
• BI rate decision, coronavirus news will be the key.

The fears of coronavirus have again dented the Asian share traders’ optimism while heading into the European session on Thursday. The reason could be traced from the increasing toll of the infected and dead people from Japan and Singapore whereas numbers from China surprised due to re-revised methodology. Also adding to the market’s fear are downbeat comments from the rating giant S&P and the International Monetary Fund’s (IMF) Managing Director Kristalina Georgieva.

In doing so, the Asian shares pay a little heed to the People’s Bank of China’s (PBOC) rate cut as well as the Aussie unemployment rate that increased the odds of the RBA’s rate cut.

That said, the MSCI’s index of Asia-Pacific shares (ex-Japan) declines 0.60% whereas Japan’s NIKKEI also trims the early day gains to 28,480. Further, Chinese indices are positive but Hong Kong’s HANG SENG drops 0.60% to 27,495 by the press time.

Indian equity benchmarks fail to register whereas Indonesia’s IDX Composite is trying to remain positive around 5,935 ahead of the Bank Indonesia’s (BI) rate decision. Moving on, Stocks in Australia and New Zealand are positive on the back of expected rate cuts from the RBA, due to the recent disappointment from January month employment data.

The US 10-year treasury yields also fail to remain positive and lose more than one basis point to 1.559% whereas S&P 500 Futures can’t follow the footsteps of Wall Street benchmarks that rose to the record high the previous day.

Looking forward, Bank Indonesia (BI) is expected to announce a 25 basis points (bps) rate cut but may fail to restore the investors’ confidence unless coronavirus headlines start coming in positive.