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Virus uncertainty weighs on global shares

By Ritvik Carvalho
Shares in Asia have been mixed

Global shares are down as the coronavirus death toll exceeds that of the 2003 SARS epidemic, though Chinese shares have risen as authorities lift some work and travel curbs, helping businesses resume operations.

The dollar took a breather, trading flat against a basket of peers.

The greenback gained as a strong US jobs report defied both the expected economic hit to China from the virus and weakness in the euro zone from weak German industrial numbers.

European shares edged lower as fears over the coronavirus' economic impact still weighed on sentiment.

The pan-European STOXX 600 index fell 0.3 per cent early, with the travel and leisure sector the biggest decliner.

Ireland's main index fell as much as 1.2 per cent, dragged down by banks after Irish nationalists Sinn Fein secured almost a quarter of first-preference votes in a general election.

MSCI's All Country World Index, which tracks shares across 47 countries, was down 0.2 per cent.

Shares in Asia registered a mixed performance.

MSCI's broadest index of Asia-Pacific shares outside Japan reversed some of its early losses but was still down 0.4 per cent.

Japan's Nikkei was off 0.6 per cent, South Korea's KOSPI was 0.5 per cent weaker while Australia's benchmark index eased a shade.

China's indexes were the only ones in the black in Asia with the blue-chip index adding 0.5 per cent and Shanghai's SSE Composite up 0.3 per cent.

More than 900 people have so far died mainly in China's central Hubei province with most of the new deaths in the provincial capital of Wuhan.

To contain the spread, China's government had ordered lockdowns, cancelled flights and shut schools but on Monday, workers began trickling back to offices and factories.

"Despite the ongoing uncertainty, we continue to filter out the short-term noise and remain overweight emerging market equities," said Mark Haefele at UBS Global Wealth Management.

Monday's losses in Asia extended from Wall Street on Friday where the Dow fell 0.9 per cent, the S&P 500 declined 0.5 per cent while the Nasdaq lost 0.5 per cent.

US stock futures were positive however.

Stock markets have recovered some ground since first news of the outbreak impacted markets, as the rate of increase of reported cases apparently slows.

Also helping has been stimulus from China's central bank, which has taken a raft of measures to support the economy, including reducing interest rates and flushing the market with liquidity.

From Monday, it will provide special funds for banks to re-lend to businesses working to combat the virus.

Despite the measures, analysts expect the world economy to take a hit from an expected slowdown in China.

"For now, our best guess is that the economic disruption related to the coronavirus will cost the world economy over $US280 billion ($A418 billion) in the first quarter of this year," Capital Economics said in a note.

Elsewhere, in currencies, the euro staged a half-hearted bounce from four-month lows to be last at $1.0950.

In commodities, Brent crude futures eased 0.5 per cent to $54.22 a barrel while US crude futures fell 0.7 per cent to $49.97 a barrel.

Since January 17, oil prices have fallen by 14 per cent while copper is down around 10 per cent.

Spot gold gained 0.3 per cent to trade at $1,574 an ounce.