Asia Markets

Major Asian markets fall more than 2% to cap week of market gyrations

Key Points
  • Stocks in Asia dropped on Friday, with major indexes in Japan, South Korea and Australia all falling more than 2% each.
  • More than 95,000 people globally have been infected by the coronavirus so far, while at least 3,200 lives have been taken worldwide, according to the latest figures from the World Health Organization.
  • Stocks stateside fell sharply overnight as the benchmark 10-year Treasury yield fell to an all-time low below 0.9%. The 10-year Treasury yield was last at 0.8165%.

Stocks in Asia dropped on Friday as volatility continued to grip the markets amid investor concerns over the global coronavirus outbreak.

Japanese stocks were among the biggest losers regionally as the Nikkei 225 dropped 2.72% to close at 20,749.75, with shares of index heavyweight and conglomerate Softbank Group plunging 6.07%. The Topix index fell 2.92% to end its trading day at 1,471.46.

The Japanese yen, often seen as a safe-haven currency in times of economic uncertainty, traded at 105.93 per dollar after strengthening from lows above 108 earlier this week.

South Korea's Kospi also shed 2.16% to close at 2,040.22. The Hang Seng index in Hong Kong slipped more than 2%, as of its final hour of trading.

Mainland Chinese stocks edged lower in afternoon trade, with the Shanghai composite down 1.21% to about 3,034.51 and the Shenzhen component shedding 1.1% to 11,582.82. The Shenzhen composite also slipped 0.74% to approximately 1,915.17.

Stocks in Australia also fell, with the S&P/ASX 200 dropping 2.81% to close at 6,216.20. Australia retail turnover in January fell 0.3% month-on-month on a seasonally adjusted basis, according to the country's Bureau of Statistics (ABS).

The ABS said it expected the outbreak to "impact aggregate retail trade estimates in coming months," though there was "no apparent impact on any of the aggregate level data" in the data release for January.

Overall, the MSCI Asia ex-Japan index tumbled 2.13%.

Mizuho Bank's Vishnu Varathan wrote in a note that "there appears to be two strains of infections in the market."

"One succumbs to the sheer fear of community spread, prospects of deep economic impact from sharp drop off in demand for travel and seizures in supply-chains," said Varathan, who is head of economics and strategy at Mizuho. "The other is a strain that thrives on hopes of stimulus; be it frantic central bank rate cuts, the lull of liquidity infusions or more targeted fiscal offsets to provide pain relief."

There appears to be two strains of infections in the market.
Vishnu Varathan
Head of Economics and Strategy, Mizuho Bank

"As the two strains cross-infect one another, markets will be strained to maintain valuations, and bigger concerns about strains on global health systems and supplies mount," he said.

Shares of airlines in the region declined on Friday. Australia's Qantas Airways dropped 7.1% while Japan's ANA Holdings fell 3.76%. Over in South Korea, Korean Air Lines' stock plummeted 5.58%. Hong Kong-listed shares of China Eastern Airlines also slipped 4.08%.

The moves came after and American Airlines saw their stocks plummet more than 13% each overnight. The International Air Transport Association, an industry trade group, forecast on Thursday that airlines could lose up to $113 billion in revenue this year — the most since the financial crisis — if the coronavirus continues to spread.

At least 95,270 globally have been infected by the coronavirus so far, while at least 3,280 lives have been taken worldwide, according to the latest figures from the World Health Organization.

Overnight on Wall Street, the Dow Jones Industrial Average dropped 969.58 points to close at 26,121.28 while the S&P 500 fell 3.3% to end its trading day at 3,023.94. The Nasdaq Composite slipped 3.1% to close at 8,738.60.

Stocks stateside fell sharply as the benchmark 10-year Treasury yield fell to an all-time low below 0.9%. The 10-year Treasury yield was last at 0.8239%.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 96.559 after declining from levels above 97.3 yesterday.

The Australian dollar changed hands at $0.6615 after touching an earlier low of $0.6582.

— CNBC's Leslie Josephs contributed to this report.