Asian markets swing after shock Fed cut sinks Wall St

Asian equities fluctuated Wednesday following another sell-off on Wall Street after the Federal Reserve's steep interest rate cut exacerbated concerns about the impact of the new coronavirus on the US and global economy.

The surprise move 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.

The move, which came two weeks before the Fed's next planned policy meeting, initially sent Wall Street rallying but traders soon reversed course as they grew increasingly nervous about the economic outlook.

It also followed a much-anticipated but eventually underwhelming conference call between G7 finance ministers, which said only that they would use "all appropriate policy tools" to keep the virus epidemic from throttling growth.

"Cutting at this time is a questionable use of limited ammunition," said AxiCorp's Stephen Innes.

"Without G7 fiscal cannons firing, a rate cut alone is not going to solve supply chain issues or get people back on planes.

"The psychological benefits and positive asset price impacts of rate cuts right now may also be fleeting, especially as the market gets swamped yet again by more negative real-life headlines about new cases."
"While the action was intended to steady market confidence, the sharpness of their reaction and the off-schedule timing of the move could be interpreted as the Fed being much more concerned about the economic impact than first thought."
"While easier monetary policy helps sentiment, central banks should not be acting in isolation -- the governments should step in with fiscal measures that are timely and well designed, supporting the economies that struggle not just from the virus itself but also from preventative measures that -- in some cases -- have ground activity to a halt."