Asian stock markets fell overnight as the death toll from the coronavirus outbreak in China rose to 81 and fears mounted that it could soon cause fatalities elsewhere.
Japan’s Nikkei index dropped two per cent, Indonesia’s Jakarta composite index fell 1.5 per cent and India’s S&P BSE Sensex fell 0.5 per cent.
The growing death toll came amid what is normally the biggest celebration in the Chinese calendar, the Lunar New Year. Millions have cancelled their plans to travel to see loved ones, however, as much of the country remains in lockdown.
Stock markets in the Chinese cities of Shanghai and Shenzhen and the semi-autonomous city of Hong Kong were scheduled to open on 31 January, but will now stay shut until 2 February after Beijing extended the New Year holiday.
The number of confirmed cases rose roughly 30 per cent to 2,744 today. About half of them were in Hubei province, whose capital is Wuhan, where the outbreak is thought to have begun.
“Markets will continue to pay close attention to headlines regarding the spreading of the coronavirus,” said Danske Bank analyst Bjorn Tangaa Sillemann.
“Later this week Chinese PMI figures will be closely watched for any potential negative impact already showing up in service sector activity,” he added. PMI surveys are closely watched indicators of the health of the economy.
Jim Reid of Deutsche Bank said: “Risk off continues to be the theme in Asian markets this morning as the concerns over the coronavirus continue to rise.”
Various safe-haven assets have risen. Spot gold rose 0.5 per cent to $1,577.6 and the Japanese yen climbed 0.3 per cent against the dollar.
The yield on the US 10-year Treasury bond fell 3.6 basis points to 1.651 per cent. Yields move inversely to price.