The spread of coronavirus continues to dominate the headlines as it created many questions regarding the future of the global economy. Another factor that affected the stock markets was the decision of the Reserve Bank of Australia.
On February 4, the central bank decided to leave the cash rate at 0.75%. The Governor of the central bank, Philip Lowe, stated that low-interest rates are essential to help the country to reach full employment and to achieve the inflation target.
China is a strategic trading partner of Australia. Thus, problems in China will affect the Australian economy, as well.
Shares in Australia rose on Tuesday. The S&P/ASX 200 rose 0.37% to 6,948.70.
Stock markets on February 4
On Monday, Chinese indexes fell by more than 7%. It was the worst day for stock indexes in years.
However, on the next day, Chinese stocks started to recover after sustaining huge losses on February 3. The Shanghai composite was 1.34% higher at about 2,783.29.
The Shenzhen component also strengthened its position. Its index jumped 3.17% to 10,089.67. Moreover, the Shenzhen composite gained 1.804% to approximately 1,638.02.
In Hong Kong, the Hang Seng index increased by 1.28% as of its final hour of trading. The shares of Chinese tech giants Tencent and Alibaba rose on February 4.
Shares of Tencent gained 3.26%, while Alibaba’s shares added 4.2%.
Stock markets across Asia had a good on Tuesday. Japan has the second-largest economy in Asia. On February 4, the Nikkei 225 closed 0.49% higher at 23,084.59. At the same time, the Topix index added 0.69% to end its trading day at 1,684.24.
South Korea’s Kospi added 1.84% to close at 2,157.90.
China’s economy was struggling before the coronavirus outbreak. However, this virus could inflict additional damage to the economy. Consequently, this would influence the stock markets as investors could change their plans regarding the Chinese markets.