Shares in mainland China led losses among major Asia Pacific markets on Wednesday as investors withdrew amid concerns over the coronavirus outbreak beyond China.
By the market close, the Shenzhen component dropped 3.02% to 11,497.55 and the Shenzhen composite fell 2.705% to about 1,890.60. The Shanghai composite shed 0.83% to around 2,987.93.
Hong Kong's Hang Seng index fell 0.9%, as of its final hour of trading. The city unveiled its budget on Wednesday with measures worth 120 billion Hong Kong dollars (approx. $15.4 billion), according to Reuters, as the Hong Kong economy has taken a hit from both the coronavirus outbreak as well as months of anti-government protests that have been at times violent.
"They're certainly pulling out all the stops, this is absolutely above the high end of our expectations," J.P. Morgan's James Sullivan said, commenting on the Hong Kong budget. Still, he added that it will be some time before a recovery takes place in the city.
"You're seeing a series of structural issues at play in Hong Kong, from the retail space really going back onshore to mainland China, over time significant changes in the overall outlook for property in Hong Kong, significant changes particularly in the manufacturing space," Sullivan, who is head of Asia ex-Japan equity research at J.P. Morgan, told CNBC's "Street Signs" on Wednesday.
"I don't think one budget will be enough to move the needle on the structural issues that the economy is facing but clearly from a short-term perspective it's a lot of incremental liquidity into the marketplace," he said.
In Australia, the S&P/ASX 200 fell 2.31% to close at 6,708.10 as the sectors declined.
The heavily weighted financial subindex was down 1.98% as shares of Australia's so-called Big Four banks fell: Australia and New Zealand Banking Group dropped 1.96%, Commonwealth Bank of Australia shed 1.67%, Westpac declined 1.67% and National Australia Bank slipped 2.09%.
The moves came as an earlier data release showed the value of construction work done in the December quarter of 2019 declining. The seasonally adjusted estimate of the value of work done in total construction dropped 3% in the December quarter as compared to the previous period, data from the Australian Bureau of Statistics showed.
The Nikkei 225 in Japan slipped 0.79% to close at 22,426.19 after dropping more than 3% on Tuesday. The Topix index also saw a 0.75% decline to end its trading day at 1,606.17. South Korea's Kospi fell 1.28% to close at 2,076.77.
Overall, the MSCI Asia ex-Japan index was 1.35% lower.
Investors watched for updates on the coronavirus outbreak that is spreading outside of China, with a top U.S. health official warning Tuesday it will likely become a global pandemic.
There has been a recent spike in coronavirus cases outside of China, where the disease was first reported. South Korean authorities have confirmed more than 900 cases within the country's borders. Meanwhile, Italy has been the worst affected country outside of Asia, with more than 200 reported cases. Iran also confirmed at least 12 deaths.
Overnight on Wall Street, stocks plunged for a second straight session. The Dow Jones Industrial Average plummeted 879.44 points to closed at 27,081.36 — posting back-to-back losses of at least 800 points for the first time ever. The S&P 500 slid 3% to end its trading day at 3,128.21, posting back-to-back declines of 3%. The Nasdaq Composite fell 2.8% to close at 8,965.61.
The moves stateside came amid a confluence of factors, such as top Centers for Disease Control and Prevention (CDC) official Dr. Nancy Messonnier telling reporters on a conference call that the American public should prepare in the expectation that the coronavirus situation in the U.S. "could be bad."
Movements in the bond markets also spooked investors, with the benchmark 10-year Treasury yield hitting an all-time low. The 30-year U.S. bond yield also reached a record low. Bond prices move inversely to yields. The 10-year Treasury yield was last at 1.3454%.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 99.080 after seeing highs above 99.3 yesterday.
Oil prices edged lower in the afternoon of Asian trading hours, with international benchmark Brent crude futures down 0.51% to $54.67 per barrel. The U.S. crude futures contract also slipped 0.26% to $49.77 per barrel.
— CNBC's Fred Imbert contributed to this report.