Stocks decline throughout Asia as fears rise about global spread of deadly coronavirus
- South Korea and Italy see surge in infections, deaths, and take steps to contain virus
- ‘Investors are getting more nervous,’ said Louis Tse of VC Asset Management
Stocks fell broadly across Asia on Monday, as the world grew more concerned about the spread of the deadly coronavirus beyond China.
From Sydney to Seoul, from Hong Kong to Shanghai, equities declined, as Italy and South Korea took tougher steps to combat their growing number of infections.
The Hang Seng Index fell 1.8 per cent to 26,820. That was its lowest level in two weeks. Of the 50 constituent members of the Hong Kong benchmark, 47 posted declines.
Meanwhile the Shanghai Composite Index closed with a loss of 0.3 per cent to 3,031, even as Beijing signalled it is open to more stimulus as the virus outbreak threatens an economy that was already losing steam. The CSI 300 Index of large cap stocks traded in Shanghai and Shenzhen slipped 0.4 per cent to 4,132.
Elsewhere in Asia, South Korea’s Kospi Index closed down 3.9 per cent.
The Australian S&P/ASX 200 of large cap stocks closed down 2.3 per cent, while the Singapore Straits Time Index dropped 1 per cent. Tokyo’s market was closed Monday for the Emperor’s Birthday holiday.
Markets in Europe and the US were set for big falls as well.
“Investors are getting more nervous about the impact of the coronavirus outbreak globally, and the repercussion of more cases spreading in South Korea and Italy is profound. The coronavirus is now affecting business worldwide,” said Louis Tse, managing director of VC Asset Management.
South Korea reported 161 new cases of coronavirus, bringing its total to 763 infections while its death tolls now stands at seven, the Associated Press reported.
South Korea increased its antivirus alert level by one notch to “Red,” the highest level, the Associated Press reported, allowing for closure of schools and reduced operation of public transport and flights.
Italy says it has 152 cases and three deaths. Alarm is growing that the virus could spread from Italy to the rest of Europe. In Venice, all carnival events were cancelled, after the magical but sinking city known for it gondolas and winding canals reported two infections. Milan cancelled Fashion Week, after a man in Codogno, not far away, was suspected of infecting dozens of patients and medical staff, Bloomberg reported.
Iran has reported 43 cases, with eight deaths.
Hong Kong sentiment was hit by “global fears on the virus spread as Japan and South Korea clearly failed to contain the infection,” said Alan Li, portfolio manager at Atta Capital.
Tencent, the index heavyweight, fell 2.6 per cent to HK$392.40, below the psychologically important HK$400 level. It had closed at HK$401 on Friday.
Alibaba, the Chinese e-commerce giant that is the parent company of the South China Morning Post, is also seeing high turnover. It fell 3.5 per cent to HK$205.20.
Macau casino stocks continued their unlucky streak.
Sands China fell 1 per cent to HK$38.10, Melco International dropped 2.3 per cent to HK$17.02, Wynn Macau declined 2.1 per cent to HK$16.68, Galaxy Entertainment tumbled 3.8 per cent to HK$53.90, MGM China fell 3.3 per cent to HK$11.08, and SJM Holdings dropped 2.5 per cent to HK$8.96.
Macau casino stocks have crashed since the January 17 close, when the impact of the coronavirus became clearer. Meanwhile, casinos had to shut down for 15 days to help contain the spread of the virus, and are only slowly reopening. Beijing has yet to resume the visa programme that allows the all-important mainlanders to visit neighbouring Macau.
Want Want China Holdings fell 3 per cent to HK$6.06 after the company said late Friday that the virus will weigh on its sales. Like many companies in China, it has not fully resumed operations since the outbreak.
Oil-related stocks listed in Hong Kong fell on the gloomy outlook for oil demand.
PetroChina led the declines, sliding 4.7 per cent to HK$3.22. That was its lowest level in 15 years, according to Wind Information. The drop came after UBS lowered its target price for the company to HK$4.5 from HK$5.2. CNOOC lost 3.6 per cent to HK$11.74. China Petroleum & Chemical Corp. fell 2.1 per cent to HK$4.12.
In mainland markets, liquor distiller Kweichow Moutai dropped 2.3 per cent to 1,087.18 yuan.
Apple AirPod supplier Luxshare Precision Industry rose 1.3 per cent to 51 yuan.
Meanwhile, a gauge tracking stocks in China related to surgical face masks surged 8.1 per cent.