Asia report: Coronavirus spread sees markets sink firther
Markets in Asia sank further on Tuesday, as investors continued to keep their wallets closed as the Wuhan coronavirus outbreak spread further.
In Japan, the Nikkei 225 was down 0.55% at 23,215.71, as the safe-haven yen strengthened 0.06% against the dollar to last trade at JPY 108.84.
Looking at the benchmark’s major components, automation specialist Fanuc was down 1.1%, while Uniqlo owner Fast Retailing managed gains of 0.39% and technology giant SoftBank Group was ahead 0.31%.
Japan Airlines was down 0.38%, as travel and tourism stocks took a hit across Asia as a result of the virus, which has seen outbound tourism from China cut drastically.
The broader Topix index was also down in Tokyo, losing 0.6% by the end of trading to close at 1,692.28.
On the mainland, markets remained closed for the Lunar New Year holiday, which authorities in Beijing have extended in a bid to get on top of the coronavirus outbreak.
Health officials in China were not taking a holiday, however, confirming on Tuesday that the virus had now killed 106 people and infected a total of 4,515.
“Global equity markets are still rocking, with boards lit up red as investors manage risk in the face of China’s coronavirus outbreak,” said Neil Wilson, chief market analyst at Markets.com.
“There are no signs of this letting up - but at least market expectations have shifted markedly since the middle of last week to better reflect the risk of a rapid rise in confirmed cases.”
Wilson said the problem was investors had very limited visibility of the current situation in China, virtually zero knowledge of epidemiology and virology, and “no clue” how bad it could get or how lasting the impact could be.
“Risk models are not geared for this situation.”
South Korea’s Kospi lost 2.09% to 2,176.72, while the Hang Seng Index in Hong Kong also remained closed for the Lunar New Year holiday.
Both of the blue-chip technology stocks were red in Seoul, with Samsung Electronics down 3.29% and SK Hynix off 2.43%.
Korean Air Lines was in the red, in line with the other travel stocks in the region, falling 6.69%.
Oil prices were lower as the region went to bed, with Brent crude last down 1.04% at $58.71 per barrel, and West Texas Intermediate losing 0.61% to $52.82.
In Australia, the S&P/ASX 200 was down 1.35% at 6,994.50, with Qantas Airways descending 5.22% by the end of trading.
Across the Tasman Sea, New Zealand’s S&P/NZX 50 was 1.03% weaker at 11,685.11, also led lower by tourism stocks, with Tourism Holdings sinking 4.8%.
Majority state-owned flag carrier Air New Zealand saw its listed shares drop 1.6% by the close in Wellington as well.
Both of the down under dollars were weaker on the greenback, with the Aussie last off 0.18% at AUD 1.4819, and the Kiwi retreating 0.22% to NZD 1.5314.