* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Shares ex-Japan up 0.9%, Shanghai stocks rally
* Focus on how fast China companies can return to work
* Sentiment supported by late jump on Wall St
* Dollar hits 4mth high on euro as US economy outperforms
By Wayne Cole
SYDNEY, Feb 11 (Reuters) - Asian share markets followed Wall
Street higher on Tuesday even as doubts grew about how quickly
China's factories could get back to work given that the
coronavirus continues to spread and deaths mount.
The total number of deaths in China has topped 1,000, well
past the toll from Severe Acute Respiratory Syndrome, which
killed nearly 800 worldwide.
Investors seemed to be hoping for the best, though. MSCI's
broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose 0.9%, while Shanghai blue chips .CSI300
rallied 1%.
Japan's Nikkei .N225 was closed for a holiday, although
Nikkei futures NKc1 traded 0.7% firmer. Futures for the
EUROSTOXX 50 .STXEc1 rose 0.7% and the FTSE FFIc1 0.6%.
E-Mini futures for the S&P 500 ESc1 added 0.3%, after a
late jump took Wall Street to fresh record highs on Monday. The
Dow .DJI ended up 0.6%, the S&P 500 .SPX gained 0.73% and
the Nasdaq .IXIC 1.13%. .N
The gains came even as the World Health Organization (WHO)
warned the spread of coronavirus among people who had not been
to China could be "the spark that becomes a bigger fire".
In China, factories were slow in re-opening after an
extended Lunar New Year break, leading analysts at JPMorgan to
again downgrade forecasts for growth this quarter.
"The coronavirus outbreak completely changed the dynamics of
the Chinese economy," they said in a note.
They assumed the contagion would peak in March and factories
would slowly resume opening this month. In this case, growth
would brake sharply to around a 1% annualised pace in the first
quarter, before rebounding to 9.3% in the second.
Should the contagion not peak until April, growth could turn
negative in the first quarter, with a rebound spread over the
second and third quarters, the JPMorgan analysts said.
UNDERESTIMATING THE DAMAGE
Analysts at Nomura said measures of migration flows within
China suggested the virus had "a devastating impact on China's
economy in January and February."
"We are concerned that global markets thus far appear to be
significantly underestimating the extent of disruption inflicted
by the virus," they wrote in a note.
The risks are such that investors are wagering on more
stimulus from Beijing, while a host of other central banks are
under pressure to safeguard their economies with cheaper loans.
Markets are pricing in almost 40 basis points of easing this
year from the Federal Reserve and again slightly inverted the
Treasury yield curve to reflect the danger of recession. US/
Fed Chair Jerome Powell appears before Congress on Tuesday
to begin two days of testimony and is expected to reiterate that
the U.S. economy is doing well but that rates can stay low given
subdued inflation.
The relative outperformance of the U.S. economy is keeping
the dollar well supported, with the euro slipping to a
four-month low at $1.0906 EUR= . The British pound GBP=
touched a two-month trough of $1.2870 and was last at $1.2913.
Against a basket of currencies, the dollar was again at its
highest since mid-October at 98.858 .DXY .
The dollar was steadier on the Japanese yen, which benefits
from being a safe haven of its own, and last stood at 109.81
JPY= . USD/
Risk aversion initially helped lift gold to its highest for
a week, only for the strength of the dollar to pull it back
0.25% to $1,5768.61 per ounce XAU= . GOL/
Oil prices bounced a little after weeks of selling, as
traders waited to see how demand in China might fare and whether
OPEC could agree to trim supplies. O/R
Brent crude LCOc1 futures firmed 72 cents to $53.99 a
barrel, while U.S. crude CLc1 rose 58 cents to $50.15.
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