TOKYO -- Major stock indexes across Asia slipped in afternoon trading after U.S. stock futures dropped sharply in after-hours trading, triggering a circuit breaker amid strong fears over the rapidly spreading coronavirus.
Japan's Nikkei Stock Average on Wednesday closed down 284 points, or 1.6%, at 16,726. The benchmark had climbed about 2% in early morning trading after Washington proposed an $850 billion stimulus to counter the pandemic's economic effects.
Investors' risk aversion returned, however, as anxiety set in about the virus and whether government and central bank countermeasures can be effective.
Other Asian indexes also declined, with South Korea's Kospi down 4.8% and Hong Kong's Hang Seng Index falling 4.5%. Mainland China's benchmark dropped 1.8%, while Taiwan's was down 2.3%.
The jitters carried over from U.S. stock futures, with the Dow futures dropping over 800 points. S&P 500 futures were down 3.6%, while the Nasdaq futures declined over 4%. With futures sliding into limit-down range, U.S. Treasury yields fell back in the red zone.
Asian markets were off to a good start earlier in the day, with indexes rising on the heels of a rebound in U.S. stocks. The Dow Jones Industrial Average gained over 1,000 points, or 5%, to settle at 21,237 on Tuesday. Investors responded positively to the massive economic stimulus plan that includes direct cash payments to Americans. Market players were also buoyant about the U.S. Fed announcing a new commercial paper funding facility to help provide credit flow to American businesses having a difficult time with short-term funding.
As Wednesday trading progressed, Asian markets lost steam. Markets remain volatile as major cities around the world start to close borders and shut down businesses and schools to slow the pandemic. Market sentiment has been dominated by concerns over the shutdowns, with investors worried about a possible global recession.