SYDNEY- Shares of companies highly exposed to ChinaӼs 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 percent 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 worldӼs second largest economy, while companies with an indirect exposure to Chinese consumer spending abroad, such as casinos and luxury retailers, also tumbled.
“We don”ºt know how long it will go,» said Peter Costello, chairman of Australia”ºs $115 billion sovereign wealth fund, the Future Fund, in a media briefing to coincide with a regular portfolio update.
“Obviously we hope that the measures that have been taken now will contain the virus but it”ºs still far too early. It will have an obvious negative effect on the Australian economy and indeed beyond,” added Costello, a former Australian treasurer.
With Chinese markets closed for the week-long new year holiday, other stock markets in Asia were feeling an outsized impact of investor concerns.
South Korean cosmetic makers highly dependent on Chinese tourists coming to Seoul stumbled, with Tonymoly and Able C&C losing more than 12 percent and 15 percent, respectively on Tuesday.
Japanese travel company H.I.S., which owns an amusement park popular with Chinese tourists in Nagasaki, has tumbled more than 14 percent since early last week.
Shares of Australia”ºs biggest airline Qantas Airways Ltd were down 5 percent on Tuesday, while travel agent Webjet Ltd fell 11 percent. South Korea”ºs top two airlines, Korean Air Lines and Asiana Airlines, dropped 6 percent and 5 percent. Japan Airlines lost 7.9 percent and airline ANA Holdings was down 6.0 percent. — Reuters
