Asian stocks stepped back on Wednesday after two sessions of sharp gains as investors turned wary on getting too optimistic about the coronavirus, with death tolls were still rising across the globe even as the number of new cases declined.
Not helping sentiment was wild volatility in the oil market, where prices rebounded in Asia after sliding on Tuesday, leaving traders dizzy as they weighed the likelihood of production cuts by key producers.
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United States crude futures jumped 5.4 percent to $24.92 a barrel, having shed 9.4 percent the session before while Brent crude added 74 cents to $32.61.
The erratic action spilt over into equities with MSCI's broadest index of Asia-Pacific shares outside Japan losing 0.5 percent.
"The recent risk rally faded quickly despite recent stimulus efforts from both monetary and fiscal authorities, with market players coming to terms with the unabated rise in fatalities as the virus continues to spread," said ING economists Prakash Sakpal and Nicholas Mapa in a note on Wednesday.
Japan's Nikkei was volatile, turning positive with a 0.53 percent gain after losing 0.7 percent earlier. On Monday, Prime Minister Shinzo Abe announced a $1 trillion stimulus package to help households and firms face the effects of the coronavirus outbreak.
South Korea's Kospi index declined 0.26 percent while Hong Kong's Hang Seng Index shed 1.01 percent.
Chinese blue chip Shanghai Composite index fell 0.58 percent after a jump in new coronavirus infections in the northern province of Heilongjianghighlighted continued risks posed by the pandemic, even as the country eases some restrictions on travel.
E-Mini futures for the US's S&P 500 benchmark share index shed early gains to turn 0.7 percent lower as investors took profits on the recent spike.
"There is reason to be cautious as this looked to be a relief rally ahead of next week's start of Q1 earning season and before data reveals the depth of the virus impact," said analysts at JPMorgan in a note.
"Data shows the recent move higher has been accompanied by short covering and derisking rather than active risk-taking on the long side." Short covering is when traders have to buy back shares they had borrowed on the assumption that their prices would fall.
The S&P 500 had ended Tuesday down 0.16 percent, having been up as much as 3.5 percent at one stage. The Nasdaq dropped 0.33 percent and the Dow 0.12 percent.
After US stock markets closed, President Donald Trump said the US might be getting to the top of the coronavirus curve.
The Trump administration asked Congress for an additional $250bn in emergency economic aid for small US businesses reeling from the pandemic.
"While the virus' 'curve is flattening', the economic effects of the corona crisis will linger for years in our view," Commonwealth Bank of Australia economist Joseph Capurso said in a note.
"Economies will take time to reopen, some businesses will not reopen and unemployment will take years to return to levels reported at the end of 2019."
Ratings agency S&P Global on Wednesday warned the cost of combatting the virus would weigh heavily on Australia's finances and changed the outlook for the country's rating to negative.
That knocked the Australian dollar down 0.6 percent to $0.6191 and hit risk sentiment generally. The US dollar eased 0.1 percent on the safe-haven yen to 108.60, while the euro dipped to $1.0877.
Against a basket of currencies, the dollar edged up 0.1 percent to 100.070.
The price of gold - seen as a safe haven during crises - eased back to $1,644 per ounce after touching a three-and-a-half-week high on Tuesday at $1,671.
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