Australian shares look set to recover as fears of a coronavirus epidemic wane.

The SPI200 futures contract was up 38 points, or 0.55 per cent, at 6,977 on Wednesday, pointing to a jump for shares when trading begins.

US equities rebounded overnight as concerns about the coronavirus epidemic appeared to fade and US economic data beat expectations.

Sentiment began to turn positive overnight on Asian media reporting that the novel coronavirus epidemic could peak within a week to 10 days, a Westpac economics and markets note says.

Then came news that a vaccine has been developed in Hong Kong, though it needs more trials, the note says.

Better US data also added to momentum later in the session.

Australia’s benchmark S&P/ASX200 index finished down 96 points, or 1.35 per cent, at 6,994.5 points in the worst day of trading for 2020.

The All Ordinaries was closed down 104.8 points, or 1.45 per cent, at 7,098.4 points.

The US dollar was buying 67.57 US cents, down from 67.59 at 1630 AEDT on Tuesday.