Asian stocks mixed after Wall Street sinks despite rate cut

European markets snapped a three-day winning streak.

"None of the other markets saw the kinds of moves yesterday that would indicate that we're out of the woods on the negative impact of the coronavirus". Shorter-term yields fell as traders increased bets for more rate cuts from the Fed later this year.

The dollar also inched up to 107.57 yen, from a five-month trough of 106.84, while the dollar index firmed to 97.389.

"The optimism coming off Super Tuesday has come and gone and we reverted to being driven by fear over the containment of the virus and the impact it's going to have on the global economy down the road", Mike Loewengart, managing director of investment strategy at E-Trade in the U.S., told CNBC.

MSCI's gauge of stocks across the globe .MIWD00000PUS gained 1.95% and emerging market stocks rose 0.83%.

The Dow Jones Industrial Average fell almost 700 points or more than 2.5 percent at the opening bell on Wall Street.

Investors are pinning their hopes on further stimulus efforts from global central banks. Health insurance companies and pharmaceuticals were among the day's big winners buoyed both by the Biden victory and new congressional cash coming from the US government to finance the development of tests, treatments and potentially vaccines for the new coronavirus.

Coronavirus death toll rises to 7 in Washington state
However, he also said the vast majority of diagnosed patients have mild to moderate symptoms and do not need hospitalization. Globally, the coronavirus has infected over 89,000 people, and killed more than 3,000, about 90% of whom are in China.

Fed to the rescue?Investors are recoiling against uncertainty over how widely the disease might spread and its impact on global and US economic growth, noted Bruce Bittles, chief investment strategist at Baird.

"While our baseline doesn't feature a lockdown scenario, we note that if authorities decide to close schools, severely restrict travel and limit all nonessential movement, the United States economy will fall into a recession - with zero GDP growth in 2020 - putting an end to the longest economic expansion ever", said Oxford Economics.

It is also the first time the central bank has cut its key rate between policy meetings since the 2008 financial crisis and the largest rate cut since then. In all of previous year, it had just one.

Yields on the 10-year U.S. treasury - a benchmark for financial products like mortgage rates and student loans - sank below 1 percent again. Travel and leisure companies are beginning to see the coronavirus impact. It was at 1.90% at the start of the year, before the virus fears took hold. Treasury yields rose but were still near record lows in a sign that the bond market remains concerned about the economic pain possible from the fast-spreading virus.

The Dow was set to open 600 points higher after losing almost 3% on Tuesday as an emergency interest rate cut by the Federal Reserve amplified fears about the extent of the economic damage from the coronavirus outbreak. But economists say they could make other moves, such as freeing up banks to lend more.

The Labor Department reported that the U.S. economy added 273,000 jobs in February, toping expectations, and unemployment dipped to 3.5 per cent, near a 50-year low. The yield has fallen for 10 straight days, its longest slide in at least a generation.

U.S crude oil futures settled down 40 cents at $46.78 a barrel. Brent crude, used to price global oils, added 84 cents to $52.70 per barrel in London. Silver fell 13 cents to $17.26 an ounce, and copper slipped 1 cent to $2.56 a pound. The euro acquired to $1.2822 from $one.1176.

  • Darren Santiago