Asian Markets: South Korea Plunges More than 3%; Airlines, Smartphone Industry at Risk
The major Asia Pacific stock indexes are trading lower on Monday, led by losses in South Korea after government officials raised its coronavirus alert to the “highest level” following a rapid spike in cases over the weekend.
On Monday morning, the Korea Centers for Disease and Control and Prevention reported that seven people have died from COVID-19. The number of cases has risen to 161 new cases, bringing the total to 763 nationwide – the country with the most cases outside the mainland.
In response to the rising death toll and the number of coronavirus cases, South Korea has raised its virus outbreak alert to the “highest level” as confirmed case numbers keep rising.
“The COVID-19 incident faces a grave turning point,” President Moon said following a meeting with ministers and experts.
“The next few days will be crucial. The government will raise the alert level to the highest level of ‘grave’ according to experts’ recommendations and drastically strengthen our response system.”
On Monday at 06:52 GMT, Japan’s Nikkei Index is trading 23386.74, down 92.41 or -0.39%. Hong Kong’s Hang Seng Index is at 26873.86, down 434.95 or -1.59% and South Korea’s KOSPI Index is at 3032.88, down 6.79 or -0.22%.
China’s Shanghai Index is trading 3032.79, down 6.88 or -0.23% and Australia’s S&P/ASX 200 Index closed at 6978.30, down 160.70 or -2.25%.
Asia Pacific Airlines Take another Hit as Travel is Further Restricted
Airline stocks in the Asia Pacific region are down sharply amid contagion fears. In Australia, Qantas Airways plummeted 7.22% while Hong Kong-listed shares of China Eastern Airlines and China Southern Airlines both fell more than 4% each.
According to Reuters, South Korea’s Korean Air Lines and Asiana Airlines said on Monday they are suspending flights to Daegu, the country’s fourth-largest city with the largest number of coronavirus cases, for the time being.
Korean Air has decided to halt all flights to Daegu until March 28, while Asiana will halt all flights to the city until March 9, their representatives said.
South Korea’s Korean Air Lines and Asiana Airlines dropped 5.52% and 5.54% respectively.
Cell Phone Industry at Risk
Samsung Electronics said on Saturday that one coronavirus case had been confirmed at its mobile device factory complex in the southeastern city of Gumi, causing a shutdown of its entire facility there until Monday morning.
Samsung Electronics, the world’s top smartphone maker, said the floor where the infected employee worked would be shut down until the morning of February 25.
Samsung’s factory in Gumi accounts for a small portion of its total smartphone production, and it makes high-end phones, mostly for the domestic market. Samsung produces most of its smart phones in Vietnam and India.
The outbreak of the coronavirus has dented the smartphone industry, with Apple warning that it expected a hit to revenues thanks to factory shutdowns, delays and store closures.
Analysts are saying that Chinese smartphone giant Huawei has been coy on coronavirus impact, with one executive stating there would be no impact on its global supply chain over the next three to six months.
However, they are deeply skeptical and say Huawei will be worse affected than Apple, since it is hugely reliant on Chinese consumers for smartphone business.
This article was originally posted on FX Empire
