Markets recover amid fragile sentiment

Asian stocks bounced yesterday, with Chinese markets reversing some of their previous losses amid official efforts to calm virus fears, although investor sentiment remained fragile, with Macau gaming and pharmaceutical shares retreating.

The SSE Composite Index closed up 1.3 percent at 2,783.29 - the biggest daily gain since December 13, 2019.

The blue-chip CSI300 index rose 2.6 percent - its biggest daily gain since July 1, 2019. About 36.40 billion shares were traded on the exchange - the highest since April 10, 2019. The volume in the previous session was 21.59 billion.

In Hong Kong, at the close of trade, the Hang Seng index was up 1.2 percent at 26,675.98.

Mobile phone gear makers gained, with Sunny Optical Technology (2382) up 4.83 percent to HK$134.6, the biggest winner among blue chip stocks. Aac Technologies (2018) inched up 0.61 percent to HK$57.4.

Pharmaceutical producers, however, retreated. Fusen Pharmaceutical (1652) fell 12.59 percent to HK$7.08, and Ascletis Pharma (1672) fell 15.35 percent to HK$4.19.

Chinese state media outlets are calling on investors not to panic after financial markets fell on Monday amid concerns about the coronavirus spreading across the country.

An op-ed published yestyerday in the state-backed Securities Times called the drop "normal" and compared it to similar market slumps after the outbreak of SARS nearly 20 years ago and the September 11, 2001 terror attacks on the United States. On Monday, the first day of trading in China following the Lunar New Year Holiday, the Shanghai Composite index fell 8.7 percent.

China's central bank said on Tuesday that its huge liquidity injections through open market operations this week showed its determination to stabilize financial market expectations and restore market confidence.

The remarks were published on the official WeChat account of the People's Bank of China (PBOC) after it injected a total of 1.7 trillion yuan (HK$1.89 trillion) via reverse repos on Monday and Tuesday.

In other news, oil prices rose yesterday, matching moves in other financial markets as investors regained calm after Monday's sharp sell-off on fears of the impact of the China coronavirus on demand for fuel sent crude to its lowest level in more than a year.

Brent crude was at US$54.66 (HK$426.35) a barrel by 10:27 am, up 21 cents, or nearly 0.4 percent, while U.S. West Texas Intermediate (WTI) crude was up 32 cents, or 0.6 percent, at US$50.43 a barrel. Agencies and Kevin Xu