Asia Markets

South Korea stocks drop about 3% as coronavirus deaths cross 100 in China

Key Points
  • Shares in Asia declined on Tuesday.
  • Overnight on Wall Street, the Dow dropped more than 450 points, wiping out its gains for the year.
  • Chinese health authorities said Tuesday that the coronavirus outbreak has killed 106 people and infected 4,515.

Stocks in Asia declined on Tuesday amid fears about the ongoing coronavirus outbreak that continues to spread.

South Korea's Kospi dropped 3.09% to close at 2,176.72. In Japan, the Nikkei 225 shed 0.55% to close at 23,215.71 while the Topix index declined 0.6% to end its trading day at 1,692.28.

Meanwhile, shares in Australia declined on the day, as the S&P/ASX 200 dropped 1.35% to 6,994.50.

The Straits Times index in Singapore also fell 2.17% in afternoon trade.

Overall, the MSCI Asia ex-Japan index was 0.81% lower.

Markets in China and Hong Kong were closed on Tuesday for holidays.

Chinese health authorities said Tuesday that the coronavirus outbreak has killed 106 people and infected 4,515.

"What is becoming a little clearer is that the Chinese economy will take a hit for a time, travel and tourism is being impacted in China, in Asia and elsewhere, including in Australia where the Chinese inbound tourism market is the largest market in exports of personal tourism and education," David de Garis, a director and senior economist at National Australia Bank, wrote in a Tuesday morning note.

Airline stocks take a hit

Shares of airline stocks in the region dropped on Tuesday. South Korea's Korean Air Lines plummeted 6.69% while Australia's Qantas Airways fell 5.22%.

Similar losses were also seen elsewhere in the region, with Singapore's Singapore Airlines declining 2.95% and Japan Airlines slipping 0.38%.

"To the extent that we're still seeing exponential growth in the people that have contracted the virus and people that have died from the virus, I think the cruise companies and the broader travel companies are gonna have to be very cautious … with no potential end in sight," James Hardiman, managing director of equities at Wedbush Securities, told CNBC's "Squawk Box" on Tuesday.

"In the near term, beyond just travel in and around China, my concern would be that all of these media reports … would start to … put some downward pressure on overall travel bookings outside of China even among Western consumers and I think there is some evidence that … at least very near term, that's likely to happen," Hardiman said.

Overnight on Wall Street, the Dow dropped 453.93 points to close at 28,535.80, wiping out its gains for the year. The S&P 500 dropped 1.6% to 3,243.63. The Nasdaq Composite had its worst day since August, dropping 1.9% to 9,139.31.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 97.954 after seeing levels below 97.6 last week.

The Japanese yen, often seen as a safe-haven currency in times of economic uncertainty, traded at 109.04 against the dollar after seeing an earlier high of 108.81. The Australian dollar changed hands at $0.6760 after touching an earlier low of $0.6744.

Oil prices were mixed in the afternoon of Asian trading hours, with international benchmark Brent crude futures slipping fractionally to $59.27 per barrel. U.S. crude futures, on the other hand, rose slightly to $53.17 per barrel.