· Asian shares took a sudden turn for the worse on Tuesday as mounting concerns about a new strain of coronavirus in China sent a ripple of risk aversion through markets.
Safe-haven bonds and the yen edged higher as investors were reminded of the economic damage done by the SARS virus in 2003, particularly given the threat of contagion as hundreds of millions travel for the Lunar New Year holidays.
The mood swing saw MSCI’s broadest index of Asia-Pacific shares outside Japan slip 1% after a steady start. Hong Kong, which suffered badly during the SARS outbreak, saw its index fall 2%.
· Japanese shares dropped on Tuesday, as investors were gripped by fears that an outbreak of a new coronavirus in China could potentially disrupt an improving economic backdrop following a U.S.-China trade deal.
Airlines and travel companies were hit by wider contagion fears, while investors scrambled to buy makers of masks, protective attires and even infrared cameras that are used for screening passengers at airports and other key locations.
The Nikkei share average fell 0.91% to 23,864.56 from a 15-month high touched on Monday and the broader Topix lost 0.53% to 1,734.97.
· China’s stocks fell to two-week lows and the yuan retreated from six-month highs on Tuesday as worries grew about a new virus that has killed four people so far, after authorities confirmed it spread through human contact.
The new virus broke out just ahead of the Lunar New Year holiday - between Jan. 24 and 31 - from the central city of Wuhan to Beijing, Shanghai and other cities, with more than 200 cases reported so far.
Chinese blue-chip stocks shed 1.7% and Hong Kong’s benchmark Hang Seng Index lost over 2% - both lingering around their lowest levels since Jan. 8.
· The pan-European Stoxx 600 dropped 0.8% at the start of the trading session, basic resources, retail and auto stocks falling more than 1% to lead losses as all sectors and major bourses entered negative territory.
The pan-European Stoxx 600 dropped 0.8% at the start of the trading session, basic resources, retail and auto stocks falling more than 1% to lead losses as all sectors and major bourses entered negative territory.
Market focus on Tuesday will likely be on the opening of the annual WEF event in Davos, where politicians and business leaders will be gathered.
Reference: Reuters, CNBC
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