Asia stocks mixed as investors watch virus developments; Softbank surges more than 11%

Stocks in Asia were mixed on Wednesday morning as concerns over the ongoing coronavirus outbreak continued to weigh upon investor sentiment.

In Japan, the Nikkei 225 gained 0.47% while the Topix index remained in negative territory as it declined 0.2%.

Shares on Japanese conglomerate Softbank Group jumped 11.61% after earlier skyrocketing more than 12%. The moves came after a judge stateside approved a merger between T-Mobile and Sprint. Softbank is a majority shareholder of Sprint.

Mainland Chinese stocks were mixed in early trade, with the Shanghai composite down 0.11% and the Shenzhen component gaining 0.34%. The Shenzhen composite added 0.292%. Hong Kong’s Hang Seng index was 0.3% higher.

Meanwhile, South Korea’s Kospi was fractionally lower.

Stocks in Australia held on to gains, with the S&P/ASX 200 gaining 0.49% as shares of Commonwealth Bank of Australia surged 3.53%.

Shares of Australian health supplements firm Blackmores bucked the overall trend as they plunged more than 16%. The company had earlier announced a scrapping of its dividend and the expectation that this year’s profit will more than halve as its supply chain is impacted by the coronavirus outbreak, according to Reuters.

Overall, the MSCI Asia ex-Japan index traded 0.28% higher.

Overnight on Wall Street, the S&P 500 closed 0.2% higher at 3,357.75 while the Nasdaq Composite advanced 0.1% to end its trading day stateside at 9,638.94. The Dow Jones Industrial Average rose as much as 138 points before closing flat at 29,276.34.

The moves came after U.S. Federal Reserve Chairman Jerome Powell said the central bank is “closely monitoring” the situation surrounding the ongoing coronavirus outbreak and its potential impact to China and the global economy, though he noted that it is “too early to say” how the disease could hit the U.S. economy.

Powell’s comments come as investors continue to grapple with uncertainty surrounding the virus that has already taken more than 1,000 lives, with most of them coming from China, where the outbreak was first reported.

“Based on (Powell’s) comments, it is clear that the Fed is unfazed because China has taken strong measures to contain the virus and provide liquidity. There are very few cases in the US and so far, the impact on the US economy is limited,” Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, wrote in a note dated Feb. 11.

Lien warned, however, that “many factories supplying US business in China remain shut and flights to China remain canceled.”

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 98.762 after declining from levels above 98.8 seen yesterday.

The Japanese yen traded at 109.84 against the dollar after seeing levels around 109.9 yesterday. The Australian dollar was at $0.6728 after seeing an earlier low of $0.6709.

Oil prices rose in the morning of Asian trading hours, with international benchmark Brent crude futures up 1.33% to $54.73 per barrel. U.S. crude futures also added 0.88% to $50.38 per barrel.