Asian Shares Plunge as Investors Seek Safe-Haven Protection Amid Coronavirus FearsA top U.S. health official sparked a stock market sell-off after warning on Tuesday the coronavirus will likely become a global pandemic. The health official also added that it’s just a matter of time before the outbreak starts to spread to the U.S.
The major Asia Pacific stock indexes plunged on Wednesday in reaction to a U.S. warning to Americans to prepare for the possibility of a coronavirus pandemic. The same warning jolted Wall Street on Tuesday, pushing safe-haven U.S. Treasurys to record lows. The benchmark S&P 500 Index and blue chip Dow Jones Industrial Average both shed more than 3% yesterday in their fourth straight session of losses.
On Wednesday, Japan’s Nikkei 225 Index settled at 22426.19, down 179.22 or -0.79%. Hong Kong’s Hang Seng Index closed at 26683.71, down 209.10 or -0.78% and South Korea’s KOSPI Index finished at 2076.77, down 26.84 or -1.28%.
China’s Shanghai Index settled at 2076.77, down 26.84 or -1.28% and Australia’s S&P/ASX 200 closed at 6708.10, down 158.50 or -2.31%.
Corona Virus Update: U.S. Health Official Warns of Global Pandemic
Investors continued to monitor the internet 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. The health official also added that it’s just a matter of time before the outbreak starts to spread to the U.S.
“Current global circumstances suggest it’s likely this virus will cause a pandemic,” Anne Schuchat, principal deputy director of the Centers for Disease Control and Prevention, told reporters at a news briefing.
“It’s not so much a question of it this will happen any more, but rather more a question of when this will happen and how many people in this country will become infected and how many of those will develop severe or more complicated disease,” she added.
Centers for Disease Control and Prevention (CDC) official Dr. Nancy Messonnier also told 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.”
Hong Kong Plans on Spending $15 Billion to Support Economy amid Coronavirus Crisis
The Hong Kong government has announced 120 billion Hong Kong dollars ($15.4 billion) worth of measures to support its economy, which has been dragged down by pro-democracy protests and the new coronavirus outbreak.
The Hong Kong economy entered its first recession in a decade when it posted a 2.8% year-on-year decline in third-quarter gross domestic product. In the fourth quarter, the city’s GDP fell by 2.9%. For the whole of 2019, Hong Kong’s economy contracted by 1.2% – the first annual GDP decline since 2009, said Hong Kong’s Financial Secretary Paul Chan in his budget speech on Wednesday.
Australian Shares Plunge on Coronavirus Fears, Declining Construction Work
In Australia, the benchmark S&P/ASX 200 Index fell after coronavirus fears drove down bond yields, taking the Big Four banks with them. 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%.
Stocks also weakened after the Australian Bureau of Statistics said the value of construction work done in the December quarter of 2019 declined. 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.