Stock markets tumble as coronavirus death toll soars in China

KUALA LUMPUR: The deadly Wuhan coronavirus is sending shivers across the global equity markets. The death toll from the virus reached 106 yesterday.

Asian stocks, especially shares of companies highly exposed to China’s economy, declined yesterday. Investors and traders were also concerned about the impact of global travel bans associated with the virus outbreak.

OANDA Asia Pacific senior market analyst Jeffrey Halley said the entire Asia-Pacific region has a very high reliance on China and thus, are in the front of the firing line of viral-induced growth concerns on the world’s second largest economy.

“That situation is likely to remain the status quo until we have a clear picture of China’s progress in controlling the Wuhan virus.

“One silver lining is that the region is well placed for an equally speedy recovery if positive news starts to emerge from the mainland,” he said in an email.

In Malaysia, the FBM KLCI dropped 1.35%, mirroring the downtrend in regional stock markets as investor sentiment was hit by concerns over the impact of the coronavirus. Healthcare stocks bucked the trend.

On Monday, Wall Street had its worst day in three-months overnight as virus fears saw equities wilt in the face of a rush to liquid haven assets. The S&P 500 fell 1.57%, the Nasdaq fell 1.89%, and the Dow Jones fell 1.57%.

Asian markets saw a sell-off yesterday, with Japan’s Nikkei 225 down 0.55% to 23,215.71, the lowest close since three weeks ago. Reuters reported that selling in Japan’s stock market widened after being initially concentrated in sectors that are likely to be directly hit by the virus, such as tourism and related industries.

South Korean shares also suffered their worst session in more than 15 months yesterday, as the Kospi plunged 3.09% to close at 2,176.72. Reuters said stocks exposed to China, the biggest buyer of South Korean goods, dominated the losses. South Korean cosmetic makers highly dependent on Chinese tourists visiting Seoul, also tumbled.

Singapore’s Straits Times Index was down by 2.10% and Jakarta’s Composite Index by 0.36%.

Meanwhile, China has extended closures of the Shanghai and Shenzhen exchanges to Sunday, as authorities stepped up efforts to control the coronavirus outbreak. Trading will only resume on Feb 3.

Hong Kong Exchanges & Clearing Ltd said its markets will be open as usual today following their closure for the Lunar New Year holiday.