Japan stocks plunge more than 3% as virus fears grow

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Tokyo: Asian shares have extended losses and stocks in Japan saw sharp declines on Tuesday following an overnight plunge on Wall Street as fears of the economic impact from the coronavirus outbreak spread.

Returning from a Monday holiday, the Nikkei 225 plunged 3.97% in early trade, before easing to losses of 3.36% as shares of index heavyweight Fast Retailing dropped more than 4%. The Topix index also declined 3.23%.

Shares of Fujifilm bucked the overall trend to surge more than 4% after local media reports that the Japanese government was considering the use of an anti-flu drug developed by a unit of the firm to treat the coronavirus.

Shares in mainland China were lower by the afternoon, with the Shanghai composite dropping 2%. The Shenzhen component also slipped 1.74%. The Shenzhen composite shed 2%.

Overall, the MSCI Asia ex-Japan index was 0.05% lower.

European and U.S. stocks had suffered their biggest loses since mid-2016 amid fears the coronavirus was morphing into a pandemic that could cripple global supply chains and wreak far greater economic damage than first thought.

Central banks across Asia have already been easing policy, while governments have promised large injections of fiscal stimulus, something western countries might also have to consider.

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