Asian markets rose Tuesday with Shanghai fluctuating between positive and negative as bargain-buyers stepped in after the previous day's rout but trading floors remained anxious as China's deadly virus claimed more lives.

Investors tracked gains in Wall Street and Europe following last week's rout, though focus remains on authorities' efforts to contain an outbreak that has now infected 20,000 and killed more in mainland China than the SARS epidemic, which hammered Asian economies in 2003.

The virus has now spread to more than 20 countries and several others have imposed tough travel rules including banning flights to and from China, while the World Health Organization has declared a global health emergency.

And in a rare admission, Beijing admitted "shortcomings and difficulties" in its response to the crisis, which many fear could slash growth in the world's number two economy and impact other countries that rely on its supply chains.

Observers said China's leaders were considering lowering their GDP forecasts for this year owing to the epidemic.

"The coronavirus is currently inflicting a heavy blow to its economy, so it stands to reason that growth will be much weaker, even if there is ultimately a rebound of sorts next quarter on a quick passing of the viral epidemic," said National Australia Bank's David de Garis.

Having dived nearly eight percent on Monday, Shanghai stocks were up 0.7 percent in early trade, boosted by a central bank injection of almost $60 billion into the financial markets, which is on top of the $173 billion pumped in on Monday.

Hong Kong climbed more than one percent a day after data showed the city's economy contracted last year for the first time since 2009, but at a slightly slower rate than feared.

Elsewhere Singapore, Seoul, Manila and Taipei were all more than one percent higher, while Sydney put on 0.5 percent and Jakarta added 0.9 percent. Tokyo went into the break marginally higher.

The buying sentiment extended to the oil markets, where both main contracts were slightly higher, having plunged Monday on worries about the effect on demand for the commodity in the world's biggest consumer.

OPEC and other major producers will gather this week to analyse the price drops, a source close to the cartel said at the weekend.

On currency markets, the pound stabilised after taking a hit Monday against the dollar and euro after Britain and the European Union offered very different ideas for their future relationship that fanned concerns about this year's trade talks.

Novel Coronavirus
More than 20,000 people have now been infected by the virus, with 425 dead, while it has spread to more than 20 countries Photo: AFP / DALE DE LA REY

The conflicting visions raised the possibility of tariffs and increased barriers being thrown up that could cripple supply chains.

"The tough talk from both sides has thrown quite a bit of cold water onto the post-election Boris bounce," Ned Rumpeltin, at Toronto-Dominion Bank in London, said.

Shanghai - Composite: UP 0.4 percent at 2,764.74

Hong Kong - Hang Seng: UP 1.1 percent at 26,645.33

Tokyo - Nikkei 225: UP 0.1 percent at 22,995.01 (break)

Pound/dollar: DOWN at $1.2987 from $1.2996 at 2140 GMT

Euro/pound: UP at 85.16 pence from 85.09 pence

Euro/dollar: UP at $1.1062 from $1.1060

Dollar/yen: UP at 108.69 yen from 108.68 yen

Brent Crude: UP 0.3 percent at $54.60 per barrel

West Texas Intermediate: UP 0.6 percent at $50.39 per barrel

New York - DOW: UP 0.5 percent at 28,399.81 (close)

London - FTSE 100: UP 0.6 percent at 7,326.31 (close)

- Bloomberg News contributed to this story -
Copyright AFP. All rights reserved.