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Nikkei Markets

Asian stocks decline as Fed, ECB steps fail to mitigate worries over pandemic

South Korean carmakers, shipbuilders among top losers on A300 index

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan fell Friday after steps by the U.S. Federal Reserve and the European Central Bank failed to alleviate worries over the coronavirus impact.

The Nikkei Asia300 index of companies outside Japan declined 0.9% to 1,158.63. Circuit breakers in Thailand, the Philippines, India, and Indonesia were triggered on Friday, but these markets ended well off their worst levels of the day.

Asian equities extended their losses after U.S. stocks tumbled about 10% yesterday to record their biggest decline in more than 30 years. The pace of new cases of the virus has quickened significantly in recent days, exacerbating worries that the global economy is headed for a major slowdown. The number of people diagnosed in the U.S. is now in excess of 1,600 from about 70 at the beginning of the month, the New York Times reported.

Europe, too, has reported a jump in new cases. In Italy, the total number of cases has surpassed 15,000 in just over a month. France, where the virus cases have surged to 2,900 from less than a month ago, yesterday ordered the closure of all educational institutes.

Amid increasing risks to economic activity, the Fed yesterday provided a $1.5 trillion liquidity injection. Before that, the European Central Bank announced new bank refinancing operations and 120 billion-euro ($135 billion) of additional asset purchases.

The measures, however, did little to ease the risk-off mood that has gripped equities in recent days.

Jeffrey Halley, a senior market analyst at OANDA, said "the limitations of monetary policy are being laid bare by the financial markets".

In movers on the A300 on Friday, South Korean carmakers and shipbuilders were among the top losers. Hyundai Motor fell 8.2%, Kia Motors dropped 5.4%, and Korea Shipbuilding & Offshore Engineering tumbled 9.2%.

Chinese carmaker Dongfeng Motor Group declined 4.7% after its February sales volume slumped 81%.

Samsung Electronics dropped 1.7% and Taiwan Semiconductor Manufacturing lost 1.4%.

Sun Pharmaceutical Industries jumped 8.3% after the Indian drugmaker said it will consider a share buyback next week.

--Nimesh Vora

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