Asia shares fall as WHO says China virus a global emergency

Shares were mostly lower in Asia on Friday after the World Health Organization declared the outbreak of a new virus that has spread from China to more than a dozen countries a global emergency. Markets in mainland China remained closed as the U.S. warned against all travel to China following the WHO's announcement.

Japan's Nikkei 225 index rose 1% to 23,205.18, while the S&P ASX/200 edged 0.1% higher to 7,017.20. Hong Kong's Hang Seng fell 0.2%, to 26,392.85 and the Sensex in India gave up 0.2% to 40,817.61. Taiwan's benchmark picked up 0.6%, while South Korea's Kospi skidded 1.4% to 2,119.01. Shares also fell in Jakarta and Kuala Lumpur.

A monthly survey of manufacturers in China showed factory activity weakened, but it did not reflect the latest developments from the virus outbreak.

A late wave of buying left major U.S. stock indexes with modest gains on Wall Street after they spent most of the day in the red. Technology companies and banks fared best.

China reported 9,692 confirmed cases of the virus on Friday with a death toll of 213, including 43 new fatalities.

Investors worry that the outbreak could end up dampening global economic growth. But those concerns appeared to ease by late afternoon after the director-general of the World Health Organization said that the organization was not recommending limiting travel or trade to China.

The impact of the WHO's decision to designate the new coronavirus a global public health emergency was offset by its recommendation not to restrict travel. But the U.S. countered that with its own advisory warning against all travel to China, and advice to Americans inside China to leave if possible.

Added to that was “the barrage of airlines cancelling flights and the resulting slowdown in economic activity that would bring which had really spooked markets," said Jasper Lawler of LCG.

The S&P 500 index rose 0.3% to 3,283.66 after falling as much as 0.9% earlier in the day. The Dow Jones Industrial Average climbed 0.4% to 28,859.44, while the Nasdaq added 0.3% to 9,298.93. Smaller company stocks recovered most of the way after taking the brunt of the selling. The Russell 2000 index slipped 0.1% to 1,648.22.

Stocks have given up some ground after a strong start to the year amid uncertainty over the virus outbreak. Still, the major indexes remain on track to end January with gains.

The WHO's move to declare the outbreak a global emergency Thursday came after the number of cases spiked tenfold in a week. The declaration means the WHO sees the virus as a risk to other countries that requires an international response.

"While the WHO declaration was anticipated to come at some point, they did stop short of suggesting travel and trade restrictions with China were necessary to prevent the spread of the virus," said Mike Stritch, a chief investment officer of BMO Wealth Management. "The aversion of a 'worst-case scenario' put a floor under equities with airlines, for example, moving higher in the afternoon."

Companies have been issuing warnings over the potential impact on profits and revenue from the outbreak. Align Technology, which makes tooth-straightening systems, gave investors a weak profit forecast because of the virus. Starbucks has already held back on raising its forecast for the year and airlines are starting to curtail flights to Chinese cities because of weak demand.

Jitters over the virus outbreak had many investors initially seeking less risky assets Thursday. That drove up the prices of U.S. government bonds and gold. The yield on the 10-year Treasury note fell to 1.55% from 1.59% late Wednesday. It rebounded to 1.58% by Friday morning.

Tesla surged 10.3% after the electric vehicle maker blew past Wall Street’s fourth-quarter earnings forecasts on record sales. The company also told investors that it is ramping up production of the Model Y small SUV, which is a key product because consumers are buying smaller utility vehicles.

Benchmark crude oil rose 79 cents to $52.93 per barrel in electronic trading on the New York Mercantile Exchange. It fell $1.19 to settle at $52.14 a barrel on Thursday. Brent crude oil, the international standard, picked up 71 cents to $58.04 per barrel. It dropped $1.58 to close at $58.33 a barrel overnight.

In other commodities trading, gold dropped $10.10 to $1,573.40 per ounce, while silver fell 16 cents to $17.83 per ounce and copper fell 3 cents to $2.52 per pound.

The dollar rose to 109.06 from 108.98 yen on Thursday. The euro fell to $1.1023 from $1.1033.