Sydney — Asian stocks stepped back on Wednesday after two sessions of sharp gains as investors tempered their optimism about the coronavirus while death tolls were still mounting across the globe.

While the number of Covid-19 hospitalisations seemed to be levelling off in New York state, deaths across the US jumped by a record 1,800. Mainland China’s new coronavirus cases also doubled in 24 hours due to infected overseas travellers.

Not helping sentiment were wild swings in the oil market, where prices rebounded in Asia after sliding on Tuesday to leave traders feeling dizzy. US crude futures jumped 5.5% to $24.93 a barrel, having shed 9.4% the session before, while Brent crude added 75c to $32.62.

The erratic action spilled over into equities with MSCI’s broadest index of Asia-Pacific shares outside Japan losing 0.7%. Japan’s Nikkei went the other way and added 0.4%, while Shanghai blue chips lost 0.6%.

E-Mini futures for the S&P 500 wobbled either side of flat, while EuroSTOXX 50 futures dropped 1.1%.

“There is reason to be cautious as this looked to be a relief rally ahead of next week’s start of Q1 [first quarter] 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 de-risking rather than active risk-taking on the long side."

The S&P 500 had ended Tuesday down 0.16%, having been up as much as 3.5% at one stage. The Nasdaq dropped 0.33% and the Dow 0.12%.

After US stock markets closed, President Donald Trump said the US may be getting to the top of the coronavirus curve. His 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 that 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 Aussie dollar down 0.6% to $0.6130 and hit risk sentiment generally. The US dollar eased 0.1% on the safe-haven yen to 108.80, while the euro dipped 0.2% to $1.0865. Against a basket of currencies, the dollar edged up 0.2% to 100.170.

Gold prices eased back to $1,645, after touching a three and a half-week high on Tuesday at $1,671.