Asia stocks fell sharply on Thursday after the Dow Jones Industrial Average plunged into bear market territory overnight, as the World Health Organization (WHO) declared the coronavirus outbreak a global pandemic.
In Japan, the Nikkei 225 declined 4.41% to close at 18,559.63, leaving it in a bear market — more than 20% lower than its 52-week closing high. The Topix index plunged 4.13% to end its trading day at 1,327.88. The Japanese yen, often seen as a safe-haven currency, traded at 103.72 following an earlier high of 103.08.
South Korea's Kospi also plummeted 3.87% to close at 1,834.33.
Mainland Chinese stocks were lower on the day, with the Shanghai composite declining 1.52% to around 2,923.49 and the Shenzhen component down 2.31% to 10,941.01. The Shenzhen composite shed 2.196% to approximately 1,818.56.
Overall, the MSCI Asia ex-Japan index dropped 4.52%.
"The real issue is a supply-side and demand-side disruption associated with COVID-19 and that's really hard to predict," said James Cheo, chief market strategist for Southeast Asia at HSBC Private Banking.
"Policy measures, particularly fiscal policy or even interest rate cuts, do not address directly to these issues," Cheo told CNBC's "Street Signs" on Thursday. "You really need coordinated health policies and health authorities to actually stem this, contain this rise in COVID-19 cases."
The strategist said markets are in for a "rollercoaster ride," adding that the best strategy at present is to diversify across asset classes as it is "too early to add aggressively to risk."
U.S. President Donald Trump gave an address on Wednesday night Eastern Time to announce measures to tackle the coronavirus outbreak. That included a ban on travelers to the United States from Europe for the next 30 days.
Trump also announced that he would ask Congress for legislative action to provide payroll tax relief, as well as other measures for several groups impacted by the virus.
That comes after the WHO declared COVID-19 a global pandemic on Wednesday.
"We're deeply concerned both by the alarming levels of spread and severity, and by the alarming levels of inaction," said WHO Director-General Tedros Adhanom Ghebreyesus. "We have rung the alarm bell loud and clear."
Shares of airlines in Asia Pacific plunged following Trump's announcement. Australia's Qantas Airways dropped 9.9% while Japan's ANA Holdings fell 5.63% and Japan Airlines plummeted 7.03%. In South Korea, Korean Air Lines declined 4.62%. In afternoon trade, Hong Kong-listed shares of China Southern Airlines fell 5.56% while Singapore's Singapore Airlines shed 3.65%.
Overnight on Wall Street, the Dow plummeted 1,462.94 points to close at 23,553.22 — more than 20% lower than the record close set only last month and putting to end an expansion that started in 2009 amid the financial crisis. The S&P 500 ended its trading day day 4.9% lower at 2,741.38 and just short of a bear market. The Nasdaq Composite fell 4.7% to 7,952.05 and was also about 19% below its all-time high.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 96.415 after an earlier high of 96.66.
The Australian dollar changed hands at $0.6442 after seeing highs above $0.657 earlier this week.
Oil prices dropped in the afternoon of Asian trading hours, with international benchmark Brent crude futures down 4.11% to $34.32 per barrel. U.S. crude futures also slipped 4.21% to $31.59 per barrel.
— CNBC's Christina Wilkie and Fred Imbert contributed to this report.
This report was updated to reflect that U.S. President Donald Trump gave an address on Wednesday night Eastern Time to announce measures to tackle the coronavirus outbreak.