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Nikkei Markets

Asian stocks plunge amid rising concerns over global virus epidemic

Industrial commodity producers, energy firms among top losers on A300

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan plunged Friday, extending losses triggered by the fears over the novel coronavirus's impact on businesses.

The Nikkei Asia300 index of companies outside Japan fell 2.7% to 1,273.39, taking its losses for the week to 6.6%.

Asian equities fell after the S&P 500 Index suffered its worst session in nine years overnight. The benchmark U.S. gauge is down more than 10% this week, heading for its worst performance in more than a decade.

Global financial markets have been pressured all of this week as concerns deepen over the spread of the virus beyond China. An increase in the number of cases in major economies like South Korea and Italy, reports of first infections in several European countries, and a warning by the U.S. federal health agency about the virus reaching the U.S. have sapped the appetite for risk assets.

Earlier on Friday, South Korea reported that the number of cases had surpassed 2,000. Total cases in Italy have crossed 600.

"The rise in the number of new confirmed cases of the virus across more geographies in recent days has led to renewed concerns over the economic impact," Morgan Stanley said in a note. "Moreover, this disruption to global economic activity is happening at a time when the starting point of global growth is still relatively weak and is just recovering from the effects of trade tensions in 2019."

The risks to global growth from the epidemic and the equity selloff have boosted the possibilities of a rate cut by the U.S. Federal Reserve. There is now a more than 90% chance that the Fed will cut its rates next month compared with just 10% a week ago, according to the CME FedWatch Tool.

Amid worries over growth, industrial commodity producers and energy related firms were among the major losers on the A300. Zinc miner Vedanta dropped 12.6%, aluminum and copper company Hindalco Industries lost 7.1%, and Tata Steel dropped 7.6%. Hyundai Steel declined 4.6% while CNOOC shed 4.5%.

Hyundai Motor fell 5%. A Hyundai Motor worker was tested positive for the virus, leading to suspension of production at a factory in South Korea's city of Ulsan, the company said Friday, according to Reuters.

Hong Kong real estate firm Sun Hung Kai Properties slid 2% after reporting that its net profit for the six-month period ended Dec. 31 fell nearly 25%.

Diversified Hong Kong-conglomerate CK Hutchison Holdings fell 1.4% after saying that its Canadian associate company Husky Energy had recognized non-cash asset impairment and other charges of C$2.3 billion ($1.72 billion) in its fourth-quarter earnings.

Wharf Holdings plunged 16.6% following resumption in trading for the first time after its controlling shareholder Wheelock & Co. received a privatization proposal that would include an issuance of Wharf shares to Wheelock shareholders. Wheelock sank 10.1% after soaring almost 40% on Thursday.

Malaysian conglomerate Genting slipped 4.1% after fourth-quarter net profit declined 19.3% on-year, partly due to losses in joint ventures and associates and finance costs.

--Nimesh Vora

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