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Nikkei Markets

Asian stocks rebound as central banks pledge support to fight virus impact

Samsung Electronics and Tencent among gainers on A300 index

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan rebounded Monday on expectations that central banks around the world will step in to contain the economic fallout of the novel coronavirus.

The Nikkei Asia300 index of companies outside Japan advanced 0.9% to 1,284.85, recovering after last week's 6.6% selloff amid increasing worries over the spread of the virus beyond China.

U.S. Federal Reserve Chair Jerome Powell said Friday that the virus posed evolving risks to economic activity and the Fed will act appropriately to support the economy. His remarks further strengthened the already high expectations that the central bank would cut rates at this month's meeting. There is now a 100% chance the Fed will ease rates at the March 17-18 meeting, according to CME FedWatch Tool.

"Financial markets are increasingly looking for the Fed to deliver an interest rate cut, and indeed a series of interest rate cuts, with markets pricing in nearly a 66% probability of a return to the zero lower bound this year," Morgan Stanley said in a note.

More central banks offered support in the face of the growing coronavirus threat. The Bank of Japan said in an emergency statement on Monday that it will monitor developments carefully amid unstable movements in financial markets due to heightening uncertainty. The authority added that it will offer sufficient liquidity via market operations and asset purchases.

Meanwhile, expectations that China would take more measures to support the economy climbed after data over the weekend showed that China official manufacturing PMI (Purchasing Managers Index) plunged to a record low of 35.7 in February from 50 in prior month. The non-manufacturing PMI declined to 29.6 from 54.1. Confirming the dismal official PMI, the Caixin manufacturing PMI released on Monday posted a reading of 40.3, down from 51.1 in January.

In major movers on the A300, heavyweight Samsung Electronics added 1.5% and Tencent Holdings rose 0.9%.

Tenaga Nasional advanced 3.3% after the Malaysian electric-utility firm swung to a net profit in the December quarter.

Macau casino operator Galaxy Entertainment Group shed 0.6%. Data released over the weekend showed that Macau's gross gaming revenue last month fell 87.8% year-on-year.

CIMB Group Holdings dropped 4.6% after Malaysian lender's fourth-quarter net profit declined 24% on-year.

New World Development retreated 1.7% after the Hong Kong property developer said Friday that its net profit for the six months ended Dec. 31 plunged by more than 90% from a year earlier.

IHH Healthcare dropped 0.4% after the Malaysian company said fourth-quarter net profit plunged 92% on-year.

India's benchmark Sensex index ended 0.4% lower, reversing a more-than-2% intraday gain after the country reported two fresh cases of the coronavirus infection, including one in the national capital New Delhi. State Bank of India fell 5.1% and Reliance Industries lost 1%.

--Nimesh Vora

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