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Nikkei Markets

Asian stocks plunge after Trump bans travel to US from Europe

Industrial commodity producers among biggest losers on A300 index

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan plunged Thursday as U.S. President Donald Trump's decision to ban travel from Europe to contain the coronavirus outbreak further damped investor sentiment.

The Nikkei Asia300 index of companies outside Japan lost 4.8% to close at 1,168.64.

Asian equities fell alongside U.S. equity index futures after Trump imposed a 30-day travel restriction from Europe to U.S. to contain the spread of the virus. Europe, outside of China, has been the most affected region from the outbreak, which the World Health Organization yesterday labeled a pandemic. Italy has reported more than 12,000 cases and Germany, Spain and France about 2,000 each. Italy is in a lockdown and yesterday it expanded the shutdown to nearly all businesses.

Japan paced losses in Asian equities along with South Korea and Hong Kong. The Nikkei 225 Index dropped 4.4%, Hang Seng Index declined 3.7%, and Kospi fell 3.9%, while India's Sensex index plunged 8.2%. Futures on the S&P 500 Index were last trading 4.5% lower.

Risk appetite was further weakened by dissatisfaction over the steps laid out by Trump to alleviate the economic impact of the virus. The U.S. president said that he would be taking emergency action to help business owners and individuals and asked the Congress to include paid sick leave provisions and payroll tax cut in the stimulus package being considered.

Jeffrey Halley, a senior market analyst at OANDA, said Trump did not announce "any concrete measures to buffer the economy against the impending coronavirus slowdown" and that was "probably disappointed markets more than anything."

Industrial commodity producers were among the biggest losers on the A300. Hyundai Steel tumbled 7.9%, Tata Steel fell 4.2%, Vedanta plunged 13.3%, and Hindalco Industries lost 13%.

Korea Shipbuilding & Offshore Engineering paced losses among shipbuilders, falling 6.7%. Tencent Holdings led technology stocks lower, slipping 3.9%.

Insurer AIA Group fell 4.4% after reporting results for last year. The company said profit last year more than doubled, but warned that the coronavirus had caused "significant disruption in the group's new business sales in the first quarter from reduced face-to-face interactions."

Swire Pacific declined 4.1% after the Hong Kong-based conglomerate said Thursday that its net profit last year fell 62%, dragged by lower valuation profits on its investment properties. Its chairman said businesses in Hong Kong and mainland China are being adversely affected by the virus and the effect on aviation unit Cathay Pacific was "severe." Shares of Cathay Pacific Airways fell 4%.

-- Nimesh Vora

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