Asia report: Markets sink further on global pandemic fears

In Japan, the Nikkei 225 was down 3.67% at 21,142.96, as the yen - broadly considered to be a safe-haven currency - strengthened 0.88% against the dollar to last trade at JPY 108.63.

Of the major components on the benchmark index, automation specialist Fanuc was down 3.93%, Uniqlo owner Fast Retailing was off 2.84%, and technology giant SoftBank Group was 4.31% weaker.

The broader Topix index was 3.65% weaker by the end of trading in Tokyo, falling 3.65% at 1,510.87.

Fresh data out of the country showed retail sales were down 0.4% year-on-year in January, which was somewhat better than the 1.1% decline forecasts by analysts polled by Reuters.

On the mainland, the Shanghai Composite was 3.71% lower at 2,880.30, and the smaller, technology-heavy Shenzhen Composite plunged 4.93% to 1,801.75.

South Korea’s Kospi ended the day down 3.3% at 1,987.01, while the Hang Seng Index in Hong Kong lost 2.42% to 26,129.93.

Both of the blue-chip technology stocks were well into the red in Seoul, with Samsung Electronics down 3.04% and SK Hynix falling 5.28%.

Global market sentiment has fallen through the floor in recent days, as the coronavirus strain continued to spread rapidly outside of China, where infections have been primarily concentrated until recent weeks.

South Korea confirmed more than 1,700 infections by Friday, and in Italy, which has the largest number of cases in Europe, more than 600 people had tested positive for the virus.

“With the coronavirus having now breached the Chinese borders and spreading in some cases despite no clear connection to breakout areas, investors have finally accepted the reality of the situation,” said Oanda senior market analyst Craig Erlam.

“Suddenly the threat of a pandemic on global supply chains and the economy has set in and investors are fearing the worst, while not really knowing exactly what that is.”

Oil prices were lower at the end of the Asian day, with Brent crude last down 2.78% at $50.77 per barrel, while West Texas Intermediate was 3.61% lower at $45.45.

In Australia, the S&P/ASX 200 was off 3.25% at 6,441.20, while across the Tasman Sea, New Zealand’s S&P/NZX 50 saw losses of 1.54% to close at 11,261.16.

Both of the down under dollars were weaker on the greenback, with the Aussie last off 0.91% at AUD 1.5362, and the Kiwi retreating 1.03% to NZD 1.6019.