Asian markets mostly up after shock Fed cut sinks Wall Street

Most Asian equities rose Wednesday after the Federal Reserve slashed interest rates to combat the economic fallout from the coronavirus, brushing off a Wall Street sell-off that was fuelled by concerns the central bank was panicking.

The surprise cut came as central banks around the world pledge to do what they can to mitigate the fallout from the disease, which continues to spread to new countries and is crippling economic activity.

In announcing the reduction, the bank said US fundamentals “remain strong” but warned that the “coronavirus poses evolving risks to economic activity”, the Federal Open Market Committee said in a statement.

However, Asian investors battled to build on the previous day’s gains and Tokyo ended up 0.1 percent, while Shanghai added 0.6 percent. Singapore, Wellington, Taipei and Bangkok also rose, with Jakarta up two percent on hopes for further Indonesian government stimulus.

Seoul was the standout, surging more than two percent as South Korea — which is the worst hit country outside China — reported a sharp drop in new cases of the virus.

But Hong Kong dipped 0.1 percent in the afternoon as a gauge of Hong Kong manufacturing, construction, wholesale, retail and services fell to its lowest level on record in February.

The market was being supported by the city’s de facto central bank cutting rates with the Fed owing to the local dollar’s link to the US unit.