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Nikkei Markets

Asian stocks extend losses amid mounting worries over China epidemic

Industrial commodity producers fall on concerns over China's economic outlook

HONG KONG (Nikkei Markets) -- The Nikkei gauge of Asian shares outside Japan extended losses on Monday, weighed by mounting fears over the spread of the China virus.

The Nikkei Asia300 index of companies outside Japan declined 0.6% to 1,388.10, adding to last week's 2.3% decline. Trading volumes across Asia were much lower than usual on account of holidays in China, Hong Kong, South Korea, Malaysia, Singapore, and Taiwan.

Risk assets continued to remain under pressure amid a further rise in death toll from the coronavirus and an increase in the number of people infected. China said Monday that the virus had claimed 80 lives as of yesterday and infected more than 2,700 people. That was up from 56 deaths and near 2,000 infections on Saturday.

Infections could continue to rise and the rate of epidemic will accelerate, China's National Health Commission reportedly said over the weekend.

"The rapid spread of the virus means there is no longer any doubt that it will disrupt the (Chinese) economy this quarter," Capital Economics said in a note. "If the disease is not brought under control quickly, then even our downbeat forecasts (for the first quarter) may turn out to be too high."

Outside of China, more Asian countries, as well as Canada and France, reported cases of the virus on Friday and through the weekend. The U.S. confirmed more cases.

U.S. equity index futures dropped 1% on Monday. Safe-haven demand lifted U.S. bonds and the Japanese yen.

On the A300 on Monday, shares of industrial commodity producers slipped on worries over China's economic outlook. India's Hindalco Industries dropped 3.5%, Vedanta declined 4.5%, and Tata Steel fell 4.3%. Indian lender ICICI Bank added 0.45% after reporting a more than 150% year-on-year surge in third-quarter net profit.

Thailand's PTT Exploration and Production tumbled 4.7% after Brent crude fell below $60 a barrel for the first time in three months.

Airline Garuda Indonesia, down 6.3%, paced losses among Indonesian companies.

-- Nimesh Vora

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