Asia report: Markets sink further as coronavirus cases rise

Markets in Asia finished negative on Thursday, with the Hong Kong bourse leading the losses as the number of infections from the outbreak of Wuhan coronavirus continued to rise.

In Japan, the Nikkei 225 was down 1.72% at 22,977.75, as the yen strengthened 0.13% against the dollar to last trade at JPY 108.88.

Automation specialist Fanuc was up 1.18% by the end of the day, but among the benchmark’s other major components, Uniqlo owner Fast Retailing was down 1.3% and technology giant SoftBank Group lost 3.05%.

The broader Topix index was 1.48% weaker in Tokyo, finishing its trading day at 1,674.77.

On the mainland, markets remained closed for the Lunar New Year holiday, which Beijing authorities have extended in a bid to control the spread of the coronavirus outbreak.

The virus, which is believed to have originated in a wet market in the quarantined city of Wuhan, has so far killed 170 people and infected more than 7,700 in the country, according to the latest statistics from the country’s National Health Commission.

“Fears of a pandemic may be overegging the pudding, but there is again a clear risk off mood in the market,” said Neil Wilson, chief market analyst at Markets.com.

“Cases and deaths rise, airlines are gutting their flight schedules and factories are extending holidays well into February.

“The mood in the market is one of severe concern - Hong Kong shares tumbled overnight, down 3% again while the Nikkei in Japan was off nearly 2%.”

South Korea’s Kospi was off 1.71% at 2,148.00, while the Hang Seng Index in Hong Kong sank 2.62% to 26,449.13.

Travel and tourism plays continued their slide in the special administrative region, with airline Cathay Pacifc down 2.13% and China Southern Airlines 3.34% lower.

Casino operators were also weaker amid concerns that the virus outbreak would hit the gambling mecca of Macau, with Melco International Development sliding 5.35% and Wynn Macau off 5.21%.

The blue-chip technology stocks were both in the red in Seoul, with chipmaker SK Hynix down 3.98%, and Samsung Electronics off 3.21%.

Samsung reported its fourth quarter earnings during the day, confirming a year-on-year fall of more than a third.

Investors were also digesting the latest policy decision from the Federal Reserve out of the US overnight, with the central bank standing pat on its interest rate targets, as widely expected.

The Federal Open Market Committee did, however, make an adjustment to its language around inflation, suggesting it was growing keener to see prices rise closer to their 2% target.

Chair Jerome Powell also said the Fed was keeping a keen eye on the coronavirus outbreak in China.

“There is likely to be some disruption to activity in China and possibly globally based on the spread of the virus to date and the travel restrictions and business closures that have already been imposed,” he said at the post-decision press conference.

Powell did add that it was still too early to see what the global economic impact of the outbreak could be, however.

Oil prices were lower as traders in Asia headed home, with Brent crude last down 2.68% at $58.25 per barrel, and West Texas Intermediate off 2.48% at $52.04.

In Australia, the S&P/ASX 200 was down 0.33% at 7,008.40, while across the Tasman Sea, New Zealand’s S&P/NZX 50 slipped 0.09% to settle at 11,665.65.

Both of the down under dollars were weaker on the greenback, with the Aussie last off 0.39% at AUD 1.4864, and the Kiwi retreating 0.36% to NZD 1.5375.