BEIJING — Asian stock markets followed Wall Street lower Friday after a spike in new virus cases in South Korea refueled investor anxiety about China’s disease outbreak.
Benchmarks in Tokyo, Hong Kong and Sydney retreated. Traders shifted money into bonds and gold, a traditional safe haven.
Bond markets are “sounding a warning on global growth” as virus fears spread to South Korea, Singapore and other economies, DBS analysts said in a report.
Markets had been gaining on hopes the outbreak that began in central China might be under control following government controls that shut down much of the world’s second-largest economy. Sentiment was buoyed by stronger-than-expected U.S. economic data and rate cuts by China and other Asian central banks to blunt the economic impact.
But investors were jarred by South Korea’s report of 52 new cases of the coronavirus. That renewed concern the infection is spreading in South Korea, Singapore and other Asian economies.
The Shanghai Composite Index SHCOMP, +0.74% gained 0.5% and Hong Kong’s Hang Seng HSI, -0.67% tumbled 0.7%. The S&P/ASX 200 XJO, -0.33% in Sydney lost 0.2%.
Tokyo’s Nikkei 225 NIK, -0.13% gave up meager early gains, falling 0.1%. The Kospi 180721, -1.10% in Seoul fell 1%. New Zealand NZ50GR, +0.07% , Taiwan Y9999, -0.33% and Southeast Asian markets JAKIDX, -0.59%FBMKLCI, -0.18% also retreated.
On Wall Street, the benchmark S&P 500 index SPX, -0.38% lost 0.4% on Thursday after being down as much as 1.3% at one point. The Dow Jones Industrial Average DJIA, -0.44% fell 0.4%.
A decline in numbers of newly reported Chinese virus cases suggests “the worst could be over,” they wrote. “However, alternative data suggests that a pickup in activity is still elusive.”
The Korea Centers for Disease Control and Prevention said 41 of the new 52 cases were in the southeastern city of Daegu and the surrounding region.
South Korea’s government declared the area a “special management zone” Friday. The mayor of Daegu urged the city’s 2.5 million people to stay home and wear masks even indoors if possible.
To contain the disease, China’s government starting in late January cut off most access to Wuhan, the central city where the first cases occurred, and extended the Lunar New Year holiday to keep factories and offices closed and workers at home.
Chinese authorities are trying to revive business activity but have told people who can work from home to stay there. Forecasters say auto manufacturing and other industries won’t recover to normal production levels until at least mid-March.
A rise in new cases reported in Beijing, the capital, “raises alarm” because it suggests major Chinese cities “may be under pressure to contain the virus amidst returning workers” as companies reopen, said Mizuho Bank in a report.
Benchmark U.S. crude CLJ20, -0.69% lost 33 cents to $53.55 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 49 cents on Thursday to settle at $53.78. Brent crude oil BRNJ20, -0.78% , the international standard, lost 21 cents to $59.31 per barrel in London. It rose 19 cents the previous session to $59.31 per barrel.
The dollar USDJPY, -0.15% declined to 112.01 yen from Thursday’s 112.09 yen.
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