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Nikkei Markets

Asian equities decline as China epidemic claims more lives

Chinese airlines pace losses on A300 index

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan declined Monday as the death toll from the coronavirus infections crossed more than 900.

The Nikkei Asia300 index of companies outside Japan declined 0.46% to 1,355.40.

The losses in regional equities came after China said Monday that as of yesterday, 907 people died on account of the virus and there were more than 40,000 confirmed cases. The death toll was 97 more than on Saturday, when the toll had surpassed the 2002 SARS-epidemic.

DBS Bank downgraded its growth forecasts for China, Hong Kong, and Singapore, the three countries it reckons as the most vulnerable to the epidemic. It lowered China's full year 2020 GDP forecast to 5.3% from 5.8%, that of Hong Kong to -0.9% from 1.5%, and of Singapore to 0.9% from 1.4%.

"Beyond country specific concerns, China's size (accounting for nearly a fifth of global demand) and role as a manufacturing hub, creates considerable risk to the outlook for both intermediate and finished goods shipments," DBS said.

Amid the mounting threat posed by the virus, China's central bank on Monday began the distribution of loans from a special re-lending funds established for businesses working to combat the virus.

Risk appetite across Asia was not helped by losses on Wall Street and decline in safe-haven Treasuries on Friday despite an upbeat U.S. jobs report. Employers in the world's largest economy added 225,000 jobs last month, ahead of the 160,000 expected, according to the monthly U.S. jobs report released Friday.

Chinese airlines paced losses on the A300 gauge on Monday. Hong Kong-listed shares of Air China declined 0.2%, China Eastern Airlines lost 2.1%, and China Southern Airlines dropped 5.6%. Industrial and Commercial Bank of China, down 0.7%, paced losses among lenders.

An index of Chinese companies listed in Hong Kong slipped 0.6%.

In other losers, heavyweight Samsung Electronics declined 1.2% and Tencent Holdings lost 0.5%.

Tata Steel declined 5.91% after the Indian firm swung to a net loss in the December quarter. Indian automaker Mahindra & Mahindra shed 7.15% after a 73% decline in net profit for the same quarter amid a one-time charge on investments.

Meanwhile, data released on Monday showed that consumer prices in China rose 5.4% year-on-year last month, quicker than the 4.9% expected by economists polled by Reuters. Factory prices rose 0.1%, in line with estimates.

--Nimesh Vora

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