Some Asian Countries on Brink of Recession as Virus Spreads Outside China




 

The major Asia Pacific stock indexes were mostly lower on Friday as lingering concerns over the economic impact of the ongoing coronavirus epidemic continued to drive global investors out of Asian stocks. While the impact of the virus on China's economy continues to be the main concern, investors are now reacting to the rapid spread of the coronavirus outside mainland China and its impact on Asia's economies.

On Friday, Japan's Nikkei 225 Index settled at 23386.74, down 92.41 or -0.39%. Hong Kong's Hang Seng Index finished at 27308.81, down 300.35 or -1.09% and South Korea's KOSPI Index closed at 2162.84, down 32.66 or -1.49%.

China Shanghai Index settled at 3039.67 up 9.52 or +0.31% and Australia's S&P/ASX 200 Index finished at 7139.00, down 23.50 or -0.33%.

Coronavirus Update

CNBC reported that investors continued to watch for developments on the ongoing coronavirus - also known as COVID-19 - outbreak, with the World Health Organization's (WHO) Director-General Tedros Adhanom Ghebreyesus telling reporters on Thursday that the low number of cases outside of China "may not stay the same for long."

WHO said Thursday that the new coronavirus has not yet spread widely around the world, but emphasized that the virus could break out globally at any time. Outside of China, Tedros said there are 1,076 confirmed cases in 26 countries, including seven deaths. The remarks come after health officials confirmed that the virus has spread to Iran and cases surged in South Korea overnight.

"The number of cases in the rest of the world is very small compared to what we have in China, but that may not stay the same for long," Tedros said. "The window of opportunity we have now may close, so we need to use the window of opportunity we have now by hammering the outbreak in any country," Tedros added.

"I think the number of cases are really manageable and I hope South Korea will do everything to contain this outbreak at this early stage," Tedros said about the situation.

Some Asia Countries on Brink of Recession

Japan and Singapore are on the brink of recession and South Korea on Friday said its exports to China slumped in the first 20 days of February as the outbreak upends global supply chains.

Factories in China, Southeast Asia's largest trading partner, have struggled to return to work as authorities ramp up containment efforts, with officials saying that January and February exports and imports will be hit by the outbreak that has claimed more than 2,200 lives.

"Data suggests that a pickup in activity is still elusive, which could have negative implications on global growth," DBS Group Research said in a note.

This article was originally posted on FX Empire

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