Asia report: Markets mixed as coronavirus focus moves beyond China
Markets in Asia finished in a mixed state on Thursday, with stocks in Japan leading the region’s losses, as investors continued to digest the latest developments in the outbreak of the Covid-19 coronavirus.
In Japan, the Nikkei 225 dropped 2.13% to close at 21,948.23, as the safe-haven yen strengthened 0.43% against the dollar to last trade at JPY 109.95.
Of the major components on the benchmark index, automation specialist Fanuc was down 2.81%, fashion firm Fast Retailing lost 2.36%, and technology conglomerate SoftBank Group was off 3.25%.
The broader Topix index was 2.37% lower by the end of trading in Tokyo, ending its session at 1,568.06.
On the mainland, the Shanghai Composite managed gains of 0.11% to close at 2,991.33, and the smaller, technology-centric Shenzhen Composite rose 0.24% to 1,895.13.
The gains in China came after the World Health Organisation said overnight that the number of new daily coronavirus cases outside China was exceeding those inside the country for the first time.
South Korea’s Kospi was 1.05% weaker at 2,054.89, while the Hang Seng Index in Hong Kong was 0.31% firmer at 26,778.62.
Both of the blue-chip technology stocks were weaker in Seoul, with Samsung Electronics down 1.06% and chipmaker SK Hynix losing 1.9%.
The Bank of Korea surprised markets on Thursday, standing pat on its benchmark interest rate at 1.25%, as most analysts polled by Reuters had been expecting a rate cut.
It came as the country continued to grapple with Covid-19, as the South Korean Centers for Disease Control and Prevention reported another 334 confirmed cases on Thursday, taking the total infections there to 1,595.
The coronavirus outbreak continued to dominate the agenda during the Asian session, with the latest numbers showing that more than 81,000 people have been infected globally, with over 2,700 fatalities - the large majority of those in China.
It was the spread of the virus beyond the People’s Republic, however, that has spooked markets in recent days, with the number of cases rising fast in countries including Iran, Italy and South Korea.
“This shift has prompted real concerns about the longer-term economic impact of this virus on trade, on ports, on supply chains, and on consumer confidence,” said Michael Hewson of CMC Markets.
"While this might seem excessive for a virus that the World Health Organisation says 80% of people only experience mild symptoms of and recover quite quickly, it nonetheless speaks to a mindset on the part of investors which has completely switched from excessive optimism to outright pessimism in less than a week.”
Oil prices fell through the floor at the end of the Asian session, with Brent crude last down 2.53% at $52.11 per barrel, and West Texas Intermediate off 2.76% at $47.42.
In Australia, the S&P/ASX 200 was off 0.75% at 6,657.90, with financials subindex under pressure as the big four banks continued to slide.
Australia and New Zealand Banking Group was down 2.07%, Commonwealth Bank of Australia lost 1.08%, National Australia Bank was 1.33% weaker, and Westpac Banking Corporation ended the day 1.34% lower.
Across the Tasman Sea, New Zealand’s S&P/NZX 50 was off 0.84% at 11,437.17, led lower by energy retailers, with Contact Energy down 2.4%, Mercury NZ off 6%, and Meridian Energy falling 7.7%.
The declines in the sector came on the back of uncertainty around the future of the Tiwai Point aluminium smelter - a major consumer of the country’s hydroelectricity supply - with owner Rio Tinto currently reviewing the facility’s viability.
Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.44% at AUD 1.5213, and the Kiwi advancing 0.47% to NZD 1.5824.