MUMBAI: Indian stock markets may witness a sell-off on Wednesday in line the trend in global peers. Asian equities fell in early deals on Wednesday as the US warned its people to prepare for the possibility of a Covid-19, more popular as the coronavirus, pandemic, pulling down stocks on the Wall Street, and yields on safe-haven Treasuries to record lows.

Overnight, the S&P 500 and the Dow Jones Industrial Average shed more than 3% each – marking the fourth straight session of losses.

As a result, in early deals today, the MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.6%, Australian shares fell 1.8%, while Japan’s Nikkei stock index slid 1.1%.

Yields on the 10-year and 30-year US Treasuries teetered near record lows as worries about the economic impact of the virus outbreak boosted demand for safe-haven assets.

Oil prices recovered some recent losses in Asia, but there were lingering concerns that the expected output cuts by major oil producers will not be enough to offset a decline in global energy demand following the outbreak.

The World Health Organization has said the epidemic has peaked in China, but concern that its spread was accelerating in other countries is likely to keep investors on edge.

While the rout in equities has been global, the sell-off in Asia has not been as severe as it has on the Wall Street, which has been hit hard by the escalation of virus cases outside of Asia.

US stock futures rose 0.5% in Asia on Wednesday, but that did little to brighten the mood.

Adding to the fears was an alert from the US Centers for Disease Control and Prevention on Tuesday warning Americans to prepare for the spread of coronavirus, signalling a change in tone for the Atlanta-based US health agency.

The virus has claimed almost 3,000 lives in mainland China and has spread to dozens of other countries. Of increasing concern to investors, however, is the rising death toll in other countries. Drastic travel restrictions have slammed the brakes on China’s manufacturing and consumer spending, and there are worries other countries will face similar disruptions.

Back home, a regulatory probe found that InterGlobe Aviation Ltd violated governance and listing guidelines in some of its related-party transactions (RPTs), sending shares of India’s largest airline operator plunging.

The Securities and Exchange Board of India (Sebi) has sent its findings to an internal committee for possible penal action, according to a Mint report.

India and the US on Tuesday elevated their ties to the level of a “comprehensive global strategic partnership” and announced key pacts in areas ranging from defence to energy. The two also stepped up cooperation in the area of homeland security, with increased efforts to hold supporters of terrorism accountable, Prime Minister Narendra Modi told reporters after talks with Donald Trump. The US president had arrived in New Delhi on Monday evening after making stops in Ahmedabad and Agra.

Meanwhile, the yield on benchmark 10-year Treasury notes traded at 1.3521% on Wednesday in Asia, close to a record low of 1.3070% The 30-year yield stood at 1.8274%, above a record low of 1.7860%.

The decline in yields weighed on the dollar. The greenback was last quoted at 110.25 yen, continuing a pullback from a 10-month high of 112.23 yen.

The dollar traded at $1.0877 per euro, off an almost three-year high of $1.0778 reached on 20 February.

US crude ticked up 0.58% to $50.19 a barrel. The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+, have been sending signals that they will deepen output cuts.

However, oil could come under more selling pressure as weekly US supply data, due later on Wednesday, is expected to show a rise in inventories, according to a Reuters poll.

(Reuters contributed to the story)

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