China shares closed higher on Tuesday as new coronavirus cases in the country fell, while hopes of global policy action to limit the economic hit from the epidemic also aided sentiment.
The Shanghai Composite index closed up 0.7% at 2,992.90, while the blue-chip CSI300 index ended 0.5% higher. Both indexes jumped more than 3% on Monday.
Mainland China reported 125 new cases of coronavirus infections as of Monday, down from 202 cases a day earlier. However, cases outside China continued to rise, posing a greater risk to the global economy.
At 0700 GMT, the yuan was quoted at 6.9806 per US dollar, 0.3% weaker than the previous close of 6.962.
As of 0701 GMT, China's A-shares were trading at a premium of 28.0% over the Hong Kong-listed H-shares.
The heads of ECB and Bank of Japan issued emergency statements on Monday that echoed one from Fed Chair Jerome Powell late last week, with all three looking set to take steps to limit economic damage from the virus.
Loosening global liquidity conditions could have a spillover effect in China, while Beijing's policies to cushion the virus hit could also stay at a high level as the resumption of production in the country remains partial, Bohai Securities said in note.
Data on Monday showed China's factory activity contracted at its sharpest pace on record in February, though it is expected to improve somewhat in March as more companies slowly resume production. Nomura estimates only 44% of the hardest hit firms have resumed business as of March 1.
Nearly 300 million people have resumed work in China since the Lunar New Year break.
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