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Nikkei Markets

Asian stocks fall on China virus worries

Airlines, lenders, tourism companies drag down A300

HONG KONG (Nikkei Markets) -- The Nikkei gauge for Asian shares outside of Japan declined Wednesday as Hong Kong equities caught up with China virus-related losses across the region.

The Nikkei Asia300 index of companies outside Japan fell 0.7% to 1,366.36.

Hong Kong's Hang Seng Index, resuming trade after a four-day break, declined 2.8%. Chinese companies were among the biggest contributors to losses on both the HSI and on the A300. H-shares of Industrial and Commercial Bank of China fell 3.9%, leading lenders lower, while China Eastern Airlines, down 3.4%, paced losses among airlines. Fosun Tourism Group, a unit of Fosun International, fell 5.7% after saying revenue from its China resorts and destinations and tourism-related services would be significantly affected by the virus outbreak.

Hong Kong property developers and Macau casino operators were other major losers. Hang Lung Properties tumbled 6.7% and Galaxy Entertainment Group declined 5.2%. Macau said the number of Chinese tourists was 75% lower over the first four days of the Lunar New Year holiday, South China Morning Post reported.

Hong Kong shares were catching up with weakness across Asia earlier this week on mounting worries over the impact of the China epidemic. According to the latest updates, the virus claimed the lives of 132 people in China while about 6,000 were infected.

Cathay Pacific Airways slipped 3.2%. The Hong Kong airliner said Wednesday it will reduce capacity of flights from and to mainland China by 50% or more from Jan. 30 to March-end, Reuters reported.

While Hong Kong equities tumbled Wednesday, most other Asian equities recouped some of the recent losses. South Korea's Kospi Index advanced 0.4% after slipping 3.1% yesterday. Japan's Nikkei 225 Index rose 0.7% and India's BSE Index added 0.6%.

Technology shares performed well after Apple reported earnings that exceeded estimates. The earnings were released after U.S. markets closed yesterday. Samsung Electronics rose 0.5% and its peer SK Hynix added 1.7%.

Meanwhile, investors will eye the Federal Reserve's policy decision later Wednesday. The U.S. central bank is widely expected to leave rates unchanged.

"While it maintains a clear message that it is comfortable in a holding pattern, we expect the Fed to focus on longer-term matters such as balance sheet and its inflation framework," Morgan Stanley said in a note.

--Nimesh Vora

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