Asian share markets make cautious gains


Asian share markets have managed a tentative rally after European and US equities stabilised, though buying for month and quarter-end book balancing likely flattered the gains.

There were also hopes a survey of Chinese manufacturing due later would show a sizable improvement for March as factories began to reopen.

Forecasts are the China’s official purchasing manufacturers’ index will bounce to 45.0 from a record-low 35.7 in February.

Analysts cautioned the result could even be higher given the index measures the net balance of firms reporting an expansion or contraction in activity.

If a company merely resumed working after a forced stoppage, it would read as an expansion without saying much about the overall level of activity.

In any case, calmer markets globally helped MSCI’s broadest index of Asia-Pacific shares outside Japan rise 0.7 per cent on Tuesday. Japan’s Nikkei edged up 0.2 per cent and South Korea 1.4 per cent.

E-Mini futures for the S&P 500 added another 0.3 per cent, supported by talk of book-keeping demand.

Healthcare had led Wall Street higher, with the Dow ending Monday up 3.19 per cent, while the S&P 500 gained 3.35 per cent and the Nasdaq 3.62 per cent.

News on the coronavirus remained grim but radical stimulus steps by governments and central banks have at least provided some comfort to economies.

Infections in hard-hit Italy slowed a little but the government still extended its lockdown to mid-April. California reported a steep rise in people being hospitalised, while Washington state told people to stay at home.

Trade ministers from the Group of 20 major economies agreed on Monday to keep their markets open and ensure the flow of vital medical supplies.

Portfolio management also played a part in the forex market where many fund managers found themselves over-hedged on their US equity holdings given the sharp fall in values seen this month, leading them to buy back dollars.

That saw the euro ease back to $US1.1030, from a top of $US1.143 on Monday, while the dollar index bounced to 99.207, from a trough of 98.330.

The Japanese yen continued to attract safe-haven demand of its own, which left the dollar at 108.08 and off last week’s peak at 111.71.

Oil prices plunged to the lowest in almost 18 years on Monday as lockdowns for the virus squeezed demand even as Saudi Arabia and Russia vied to pump more product.

In a new twist, US President Donald Trump and Russian President Vladimir Putin agreed during a phone call on Monday to have their top energy officials meet to discuss slumping prices.

Prices did at least try and steady early on Tuesday, with US crude up 56 cents to $US20.64. Brent crude futures gained 25 cents to $US23.01 a barrel.

Gold was holding at $US1,616 an ounce, well up from a low of $US1,450 touched early in the month.

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