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Asian stocks end sharply lower after Wall Street plunge

Global market sell-off continues amid heightened coronavirus fears

A display reveals the carnage on the Tokyo Stock Exchange, where the Nikkei plunged 1,008.34 points before slightly recovering. (Photo by Rie Ishii) 

TOKYO -- Stocks closed sharply lower across Asia on Friday following an overnight plunge in U.S. stocks, which was sparked by mounting concern about the spread of the new coronavirus and its impact on the global economy.

The Nikkei Stock Average ended down 805.27, or 3.7%, at 21,142.96, marking the fifth consecutive decline. The average lost 2,243 points, or 9.6%, during the holiday-shortened week, the biggest point loss since the week of Oct. 6-10, 2008, when the average shed 2,661 points.

Elsewhere in Asia, the Shanghai Composite Index finished down 3.7%, while South Korea's Kospi was down 3.3% and the Hang Seng Index in Hong Kong off 2.4% at their close.

Investors piled into the yen against the dollar, driving the Japanese currency up to a one month high of 108.86.

Japanese Prime Minister Shinzo Abe took drastic action to contain the outbreak by announcing the closure of all public schools, starting March 2. But the news was overshadowed by a 4.4% drop in the Dow Jones Industrial Average overnight -- its biggest one-day drop ever.

"Fear drove investor sentiment," said Takeo Kamai, who oversees trading at CLSA Japan, following the announcement in the U.S. that there the first case of the coronavirus of unknown origin, suggesting that community spread is already occurring in the country.

Abe announced on Thursday the closing of public schools to quickly stem the spread of the virus in the run-up to the Summer Olympics in Tokyo.

"Investors are very divided right now," Kamai said. "Some see this as an opportunity to reassess fundamentals and bargain hunt in search of cheaper valuations, while others see the global slowdown and uncertainty as a trigger for further downside [in the Nikkei average] to below 20,000."

The Nikkei lost 10% over the last 5 days, while the U.S. blue chip average shed 11% this week alone.

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