Published 15:12 IST, February 21st 2020
Asian markets fall on fears over spreading virus
A spike in new virus cases outside China spooked Asian markets Friday after Wall Street pulled back from record highs as more companies warned earnings could be hurt by the epidemic.
A spike in new virus cases outside China spooked Asian markets Friday after Wall Street pulled back from record highs as more companies warned earnings could be hurt by the epidemic.
More than 2,200 people have died from the novel coronavirus, which has infected over 75,000 people, mostly in China, and spread panic around the world.
While Beijing claims its epidemic control efforts are working, the rising death toll and number of new infections abroad have rattled investors.
A batch of warnings from companies over the impact of the virus on bottom lines -- including Danish ship operator Maersk and Air France-KLM -- also fanned anxiety and dented hopes it would have only a short-term impact on earnings and economic growth.
"It took Apple to do what the coronavirus couldn't -- make stocks feel a little queasy," said Stephen Innes of AxiCorp, referring to the tech giant's warning Monday that it would miss its quarterly revenue forecast because of the illness.
"The market seemed to absorb the initial Apple shock in its typically pleasant manner, but it's the aftershocks when corporate America starts waving the warning flags in tandem that could prove to be the biggest gut check."
Seoul's Kospi index fell 1.2 percent after the country confirmed 52 more virus cases, taking its total to 156 -- the second highest national toll outside China. Japan's benchmark Nikkei 225 index was down 0.3 and Sydney was off 0.3 percent.
Mainland China's key Shanghai Composite Index was flat following central bank efforts to cushion the impact of the virus on the world's second-largest economy where manufacturing activity has been hit hard.
China reported Thursday a big drop in the number of new infections after it once again changed the method of counting patients with the virus. It was the second revision of criteria in just eight days and the flip-flopping "did not help the mood" of investors, noted Rodrigo Catril of National Australia Bank.
The National Health Commission reported 889 new cases on Friday, up from the previous day. Demand for gold, which is considered a safe haven in times of uncertainty, has benefited from the spreading virus as investors reduce their risk exposure.
China is the world's biggest importer and consumer of oil -- and prices have been particularly sensitive to the epidemic affecting dozens of countries and territories.
Both main contracts were lower on demand fears, with Brent Crude off 0.6 per cent and West Texas Intermediate down 0.6 per cent.
Updated 15:12 IST, February 21st 2020