Coronavirus infects Asia stocks with exposure to China
Shares of companies highly exposed to China’s economy tumbled across Asia on Tuesday on rising concern about the impact of global travel bans associated with a new virus outbreak, and even as some stocks involved in preventative health spiked.
After the United States and Canada warned against travel to China where the new coronavirus is thought to have originated, Australian stocks resumed trading sharply lower after a public holiday the previous day. The benchmark S&P/ASX 200 index fell 1.4% weighed by stocks exposed to the illness that has killed more than 100 people and infected more than 2,700.
Shares of airlines and travel agents were sharply lower amid freezes on travel into and out of the world’s second largest economy, while companies with an indirect exposure to Chinese consumer spending abroad, such as casinos and luxury retailers, also tumbled.
With Chinese markets closed for the week-long new year holiday, other stock markets in Asia were feeling an outsized impact of investor concerns.
Australia’s top two casino companies Crown Resorts Ltd and Star Entertainment Group ltd , which both get a sizeable portion of revenue from vacationing Chinese gamblers, each fell about 5%.
Traders meanwhile pointed to companies which might generate sales from efforts to curb the spread of coronavirus as investment prospects.
Shares of South Korean mask producer Monalisa surged 29%, while South Korean pharmaceuticals Kukje Pharma and Woojung Bio added 29% and 21% respectively on Tuesday.
Japan’s Kawamoto Corp , which supplies medical products including masks, saw its share prices tripled, while Japanese protective clothing maker Azearth rose 53% in the past week.