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Nikkei Markets

Asian equities tumble as coronavirus spreads outside China

South Korean companies among major losers on A300 index

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan tumbled Monday amid rising fears that the novel coronavirus is spreading rapidly outside of China.

The Nikkei Asia300 index of companies outside Japan fell 2.4% to 1,317.01.

Futures on the S&P 500 Index dropped 2.7% on Monday and South Korean equities led Asian shares lower after the number of virus cases outside China jumped in a matter of days. South Korea has now more than 750 cases, Italy more than 150, and Iran about 40. The number of deaths was at seven, three, and eight, respectively, in these countries.

All the three nations took steps to contain the spread of the virus. South Korea yesterday raised the virus threat, Italy forced 11 cities into a lock down, and Iran announced closure of schools and cultural centers across 14 provinces.

ING Bank said the virus was no "longer solely an Asia issue" and with Italy joining South Korea at the top of non-China infections, investors were likely to exhibit "extreme caution in the face of the global spread of the virus."

Reflecting the nervousness among investors on the threat posed by the virus, gold prices climbed to over seven-year highs and 10-year Treasury yields dropped below 1.50%. Asian currencies slipped Monday, led by the South Korean won.

Korean Air Lines paced losses among South Korean companies on the A300, tumbling 6.2%. The airline reportedly said it will suspend all domestic flights to Daegu, the city in South Korea that has the most number of virus cases.

Heavyweight Samsung Electronics dropped 4.1%, LG Electronics declined 4.2%, and Lotte Shopping shed 5.2%.

Elsewhere, Hong Kong shares of snack-maker Want Want China Holdings fell 3% after saying the coronavirus outbreak may adversely affect its business and financial performance for February and March.

Ping An Insurance Group lost 2.6% after the company reported a 13% decline in January accumulated gross premium income for its life insurance and health insurance business.

Great Wall Motor advanced 3% to HK$6.10 after the Chinese carmaker's preliminary net profit for last year exceeded consensus estimates. Morgan Stanley maintained the 'overweight" rating and a price target of HK$8 on the stock.

Hong Kong-listed electricity provider CLP Holdings declined 0.2%. The company said Monday its net profit plunged 66% last year, dragged down by an impairment provision. Telekom Malaysia slipped 1.8% after the company swung to a net loss in the fourth quarter.

Malaysia's benchmark equity index dropped 2.7% amid political uncertainty following weekend talks on forming a new coalition by Prime Minister Mahathir Mohamad's party that would exclude his designated successor Anwar Ibrahim.

--Nimesh Vora

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