HONG KONG (Nikkei Markets) -- Asian shares outside of Japan extended losses on Tuesday amid increasing worries that the global economic downturn caused by the coronavirus will deepen as countries impose more restrictions to check the pandemic.
The Nikkei Asia300 index of companies outside Japan fell 1.6% to 1,082.25.
Asian equities had to contend with the biggest rout in U.S. stocks in more than 30 years. The S&P 500 Index tumbled 12% amid the worsening economic outlook. President Donald Trump said yesterday that the U.S. economy could be headed for a recession and released new guidelines to contain the spread of the virus. The guidelines included avoiding gatherings of 10 or more people, closure of schools, and avoiding bars and restaurants.
Meanwhile, Canada yesterday closed its borders to non-citizens, except Americans, while France imposed a near-total lockdown like Italy. The Philippines on Tuesday expanded the lockdown and became the first nation to halt financial markets on account of the virus. The country's benchmark equity index is down more than 30% year-to-date, the worst in Asia.
While such restrictive measures will assist in limiting the spread of the virus, it will further hurt the already challenging world economic outlook.
"The longer countries stay in emergency status, the harder the global economy will be hit. A recession seems almost impossible to prevent at this stage," said Lukman Otunuga, a senior research analyst at FXTM.
Conglomerates MMC and YTL paced losses in Malaysian companies on the A300, falling at least 5.6% each. Malaysia yesterday announced a nationwide lockdown until this month-end following a spike in the number of coronavirus infected people.
South Korea's benchmark equity index declined 2.5% despite the Bank of Korea cutting its key rate by 50 basis points to a record low in an emergency meeting late yesterday. The won dropped 0.8%.
Hong Kong-based Cathay Pacific Airways fell 2% after the airline said combined passengers carried by the full-service international airline and its regional unit Cathay Dragon in February dropped 64.4% on year to 1.01 million, owing to the novel coronavirus outbreak.
Singapore Airlines dropped 1.8% after total number of passengers it carried in February fell about 22% on-year to 2.18 million. Overall travel demand was 'severely impacted' by the outbreak, the airline said.