Asian shares reverse gains on growing impact of China virus

BANGKOK (AP) — World shares fell back yesterday as health authorities around the world rushed to monitor and contain a deadly virus outbreak in China and keep it from spreading globally.

China and other nations have ramped up screenings for fever on aircraft and at airports. The central Chinese city of Wuhan, where the virus is concentrated, closed down its train station and airport yesterday to prevent people from entering or leaving the city.

Adding to concerns, the outbreak coincides with the annual travel of hundreds of millions of Chinese for the Lunar New Year festival, which begins today.

In early European trading, the CAC 40 in Paris lost 0.3 per cent to 5,995.49 while Germany’s DAX slipped 0.7 per cent to 13,427.91. Britain’s FTSE 100 gave up 0.2 per cent to 7,559.27. Wall Street futures edged lower, with the contract for the S&P 500 down 1.8 points and that for the Dow Jones Industrial Average falling 0.1 per cent.

In Asia, early gains were erased midsession, with Chinese benchmarks leading losses.

The coronavirus has been confirmed in five countries, including China, the United States (US), Thailand, Japan and South Korea. So far, China has confirmed more than 500 people have fallen sick and 17 have died from the illness, which can cause pneumonia and other severe respiratory symptoms.

Currency traders watch monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea yesterday. PHOTO: AP

A World Health Organization (WHO) committee met for a second day yesterday as it decides whether to declare China’s virus outbreak a global health emergency.

Japan’s Nikkei 225 index skidded one per cent to 23,795.44, while the Kospi in South Korea sank 0.9 per cent to 2,246.13. In Hong Kong, the Hang Seng dropped 1.5 per cent to 27,909.12, while the Shanghai Composite index declined 2.8 per cent to 2,976.53. Australia’s S&P ASX/200 shed 0.6 per cent to 7,088.00. Shares rose in India and Jakarta but fell in Taiwan and Singapore.

“As far as the market is concerned, the current reaction remains mild and perhaps rightly so given the difficulty to estimate the impact of an evolving syndrome,” Jingyi Pan of IG said in a commentary. By postponing a decision on whether the virus is a global health emergency, the WHO helped assuage some fears the crisis is escalating, she said.

In other news, Japan reported yesterday that its trade balance was negative in 2019 for a second straight year, as China-US trade tensions and friction with neighbouring South Korea bit into exports.

Overnight, technology companies led stocks to a flat close on Wall Street, erasing early gains. But that was an improvement over Tuesday, when investors dumped shares on fears the virus outbreak might spread, hurting tourism and ultimately economic growth and corporate profits.

While only about 10 per cent of S&P 500 companies have reported their results for the last three months of 2019, early indications are encouraging. Of those companies that have reported results, 78.4 per cent topped analysts’ forecasts for profits, according to S&P Global Market Intelligence.

Those forecasts were low, to be sure, with analysts saying S&P 500 profits fell last quarter for the fourth consecutive time, according to FactSet.

Benchmark crude oil fell 84 cents to USD55.61 per barrel in electronic trading on the New York Mercantile Exchange. It lost USD1.64 to settle at USD56.74 a barrel on Wednesday. Brent crude oil, the international standard, gave up 77 cents to USD62.13 per barrel. It slid USD1.38 to close at USD63.21 a barrel overnight.

Gold fell USD2.60 to USD1,553.60 per ounce, silver lost 15 cents to USD17.68 per ounce and copper fell three cents to USD2.77 per pound.

The dollar fell to JPY109.53 from JPY109.83 on Wednesday. The euro weakened to USD1.1085 from USD1.1097.