HONG KONG (Nikkei Markets) -- Asian stocks outside of Japan slumped Monday, as a rout in crude oil prices worsened risk sentiment that was already under pressure from the coronavirus outbreak.
The Nikkei Asia300 index tumbled 5% to 1,227.55.
Global oil prices plunged after Saudi Arabia announced plans to ramp up crude production and slash prices following a breakdown of a supply cut agreement between the Organization of Petroleum Exporting Countries and Russia. Saudi Arabia reportedly plans to boost its crude output above 10 million barrels per day in April. Brent crude futures were trading more than 20% lower at $35.94 a barrel after prices fell 9.4% on Friday. Futures had fallen to as low as $31.02 a barrel earlier.
CNOOC and PetroChina fell 17.2% and 9.6%, respectively, in Hong Kong, while Sapura Energy sank 34.4% in Kuala Lumpur. PTT Exploration and Production plunged nearly 30% in Bangkok. In Mumbai, Oil and Natural Gas Corp. lost 16.3%, while Reliance Industries shed 12.4%.
"We would eventually expect to see a bottoming-out in stocks before the commodity itself," James Trafford, an analyst and portfolio manager at Fidelity International, wrote in a note. "But that bottoming will require some stabilization in the coronavirus data points, or signs of a policy rapprochement among oil producers. In the meantime, investors should brace for volatility."
The Japanese yen surged 2.7% against the dollar as risk-averse investors bought into the safe-haven asset.
Meanwhile, fears over the economic impact of the widespread coronavirus lingered. Total cases of the infection surpassed 109,000 on Sunday, and fatalities topped 3,100.
Electric vehicle and battery maker BYD fell 8.4% in Hong Kong after saying that its February sales plunged nearly 80% from a year earlier amid the impact on demand from the coronavirus.
In Taipei, Innolux and Asustek Computer fell 4.2% and 1.2%, respectively, after each reported declines in February sales. Compal Electronics slipped 0.8% following a 27.3% tumble in last month's sales.
"The collapse in oil prices should have a limited negative first-order effect on the loan quality of Singapore's three largest banks," Eugene Tarzimanov, vice president and senior credit officer at Moody's Investors Service, wrote in a note. "But if low oil prices persist over a prolonged period, the banks will post higher non-performing loans because of second-order effects, such as a further economic slowdown in Singapore and lower corporate earnings, on top of disruptions already caused by the coronavirus."