Stock markets across Asia remained under heavy selling pressure as the rising death toll in China from a rapidly spreading coronavirus hammered investor confidence in sectors from cosmetics to commodities.
Shares in South Korea, Singapore and Australia all fell on Tuesday as these markets returned from holidays. The weakness across many of the region’s markets came as Chinese state media confirmed the total death toll from the pathogen had risen to more than 100. Most of the dead were in Wuhan and the surrounding province of Hubei, the outbreak’s epicentre.
Seoul’s benchmark Kospi index closed 3.1 per cent lower, with stocks that are exposed to a probable fall in spending by Chinese tourists as a result of the virus among the hardest hit. AmorePacific, South Korea’s largest cosmetics company, dropped 8.5 per cent while duty-free chain Hotel Shilla tumbled almost 10 per cent. Smartphone and chipmaker Samsung fell more than 3 per cent.
Singapore’s FTSE Straits Times dropped 2.3 per cent over fears the disease could hit the south-east Asian state’s economy, which is closely linked to China’s.
Margaret Yang, a market analyst at broker CMC Markets, said the economic impact of the virus on the region could be “enormous”.
“Capital is fleeing out of equity markets on this huge selling momentum,” she added, pointing to research by the University of Hong Kong that suggested tens of thousands of people in Wuhan could already be infected with the coronavirus without showing symptoms. “We are facing huge uncertainty in terms of the number of cases confirmed and how this thing will move in the next couple of weeks and even months.”
Hong Kong’s stock exchange will re-open on Wednesday while markets in mainland China do not return from the lunar new year holiday until next Monday. Shanghai has ordered companies not to reopen until February 9.
But in a statement published on Tuesday, China’s securities regulator instructed securities and futures traders to “actively guide investors to rationally, objectively analyse the impact of the outbreak and adhere to the concepts of long-term and value investment”.
In Sydney the S&P/ASX 200 index slipped 1.4 per cent as energy and mining stocks sold off on concerns over the pathogen’s impact on Chinese demand. BHP, the world’s biggest mining group, fell 3.3 per cent. Miners Rio Tinto and Fortescue Metals Group also dropped.
Commodities-focused companies fell in Tokyo, too, where the Topix shed 0.6 per cent. Gold, US treasuries and the Japanese yen — investors’ go-to havens — were little changed. Brent, the international oil marker, fell 0.1 per cent to $59.26 a barrel.
Wall Street’s S&P 500 closed 1.6 per cent lower on Monday, but equity futures were pointing to gains of 0.6 per cent when US markets begin trading later on Tuesday.