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Nikkei Markets

Asian equities slide more as China virus infections, death toll rise

Airlines across the region slump as epidemic affects travel demand

HONG KONG (Nikkei Markets) -- Asian share outside of Japan fell further on Tuesday, led by travel and Chinese tourism-related companies on rising worries over the epidemic in China.

The Nikkei Asia300 index of companies outside Japan fell 0.9% to 1,375.81. Korean Air Lines dropped 6.7%, Singapore Airlines declined 2.9%, AirAsia slid 3.8%, and Malaysia Airports Holdings lost 6.7%. South Korean cosmetics company Amorepacific Group plummeted 7.7% and LG Household & Healthcare fell 7.1%. Chinese citizens are major consumers of Korean beauty products.

Losses on the A300 gauge came amid a further increase in death toll and infections caused by the respiratory virus that has now spread to more than 15 countries. China's health commission said Tuesday that as of yesterday, the death toll from the virus climbed to 106 and more than 4,500 people were affected, Reuters reported. Beijing yesterday recorded its first death from the virus.

"Going forward, the question would be how severe the implications of the virus are," said Jingyi Pan, a market strategist at IG Asia. While sectors like transport and tourism will be the most affected, other sectors are not expected to be spared either, she added.

Among Asian economies, Hong Kong, Thailand, Singapore, and the Philippines have a high degree of risk amid the impact on Chinese tourism, Louis Kuijs, the head of Asia Economics at Oxford Economics, said.

The metal and mining sector was among the worst affected on Tuesday along with travel. Hyundai Steel declined 5.4% and Posco fell 6%. India's Tata Steel lost 3.5% and zinc miner Vedanta declined 4.5%.

Malaysian glove makers were among the top performers on the A300 on Tuesday, extending their recent rally amid expectations that the spread of the virus would fuel demand for their products. Top Glove jumped 8.3% and Hartalega Holdings advanced 3.6%.

India's Housing Development Finance Corp. advanced 1.5% after its December quarter net profit beat estimates of analysts polled by Bloomberg.

--Nimesh Vora

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