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Shares fall in Asia as virus outbreak hits profits, events

/ 01:40 PM February 18, 2020

BANGKOK  — Shares slipped in Asia on Tuesday as the impact from the virus outbreak that began in China deepened, with Apple saying it would fail to meet its profit target and China moving to postpone or cancel major events including the Beijing auto show.

People walk past an electronic stock board showing Japan’s Nikkei 225 index at a securities firm in Tokyo Tuesday, Feb. 18, 2020. Shares have fallen in Asia as the impact from the virus outbreak that began in China deepened, with Apple saying it would fail to meet its profit target and China moving to cancel major events including the Beijing auto show. (AP Photo/Eugene Hoshiko)

Signs suggest China may postpone its annual congress, its biggest political meeting of the year. The standing committee for the National People’s Congress will meet Feb. 24 to deliberate postponing the meeting that is due to start March 5.

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Japan’s Nikkei 225 index lost 1.5% to 23,170.62 while the Hang Seng in Hong Kong lost 1.4% to 27,581.19.

In South Korea, the Kospi shed 1.4% to 2,209.95, while the Shanghai Composite index shed 0.4% until 2,972.02. Australia’s S&P ASX/200 fell 0.3% to 7,106.00. Shares also fell in Taiwan, Singapore, Bangkok and Kuala Lumpur but rose in Jakarta.

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Shanghai’s benchmark jumped more than 2% on Monday after the central bank rolled out more measures to help support the economy. Most other markets also rose.

China’s biannual auto show, one of the industry’s biggest international events, has been postponed, and many sports and entertainment events have been delayed or canceled to avoid travel that may spread the virus.

The death toll from the outbreak rose to 1,868, and the total of confirmed cases to 72,436.

China reported 1,886 new virus cases and 98 more deaths in its update Tuesday. A report saying the disease outbreak has caused a mild illness in most people raised optimism among global health authorities.

But as the outbreak persists, bringing new travel advisories and disrupting trade, travel and supply chains, it is casting a vast shadow over the regional economy.

“Best to buckle in as we could be in for a bumpy ride the next few weeks as I’m struggling to find any research report that doesn’t suggest: “Covid-19 could significantly affect short term earnings: Reiterate Sell,” Stephen Innes of AxiCorp said in a report.

U.S. markets were closed Monday for President’s Day. Futures for the S&P 500 and the Dow Jones Industrial Average fell 0.3% in electronic trading on Tuesday.

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Overnight, Britain’s FTSE 100 gained 0.3% to close at 7,433.25, while France’s CAC 40 gained 0.3% to 6085.95. Germany’s DAX added 0.3% as well to end the day at 13,783.89. Wall Street remained closed for Presidents’ Day.

Apple Inc. joined the growing number of companies who are forecasting a hit to their bottom lines from the outbreak, which has prompted Chinese authorities to put cities that are home to more than 60 million people to go into lockdown.

Apple warned its investors on Monday that it won’t meet its second-quarter financial guidance because the outbreak has cut production of iPhones.

The Cupertino, California-based company said all of its iPhone manufacturing facilities are outside Hubei province, the epicenter of the outbreak, and all have been reopened. But production is ramping up slowly.

“The health and well-being of every person who helps make these products possible is our paramount priority, and we are working in close consultation with our suppliers and public health experts as this ramp continues,” Apple said in a statement.

In other trading, benchmark U.S. crude oil lost 37 cents to $51.68 per barrel in electronic trading on the New York Mercantile Exchange.

It gained 63 cents overnight to $52.05 per barrel. Brent crude oil, the international standard, lost 62 cents to $57.05 per barrel. It gained 35 cents on Monday to $57.67.

In currency markets, the dollar fell to 109.75 Japanese yen from 109.89 yen on Monday. The euro edged down to $1.0833 from $1.0836.

GSG

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