Nikkei 225, KOSPI, SET Index in post-virus slump
Asian markets made their concerns known on Monday, with major indices starting the week on a meek note.
As fear and uncertainty surrounding the unfolding China coronavirus grows, Asian markets – the epicentre of the contagion – have found themselves hardest hit, with major benchmarks suffering steep losses in the week’s first two days of trading.
While short-term impact is expected, IG Asia Market Strategist Pan Jingyi writes that based on the experience of the SARS coronavirus in 2003, regional markets could see ‘see impact linger for a longer duration than the west going by the current state of the virus spread’.
Almost every component on Japan’s Nikkei 225, Thailand’s SET Index, and South Korea’s KOSPI has been negatively impacted by the plague, with travel and tourism stocks undoubtedly driving most of the selling momentum.
With the Chinese markets closed for Chinese New Year until 03 February, analysts are worried about what the true economic impact of the virus is.
‘Over the weekend you saw more cases,' said Quincy Krosby, chief market strategist at Prudential Financial. ‘That got investors and traders worried that this may be a longer event. The next question is, “What happens to global growth if this does continue and magnify?”’
Japan: Nikkei 225 ↓ 2.9%
Japan’s primary benchmark index Nikkei 225 fell 2.9% in just one full day of trading.
As of 10am on Tuesday (28 January), the index is down to a two-week low of 23,137.989 from the previous week’s close of 23,827.18.
A day earlier on 27 January, travel sector stocks saw share prices descend to new lows – Japan’s largest airline All Nippon Airway Holdings Inc lost 3.02% in share price in early trade to hit a six-month low, while main airport operator Japan Airport Terminal Co. opened 6.9% lower than Friday’s market for a three-month nadir.
The more-focused Topix Index, which measures a more concentrated list of blue-chip firms trading on the Tokyo Stock Exchange, also lowered by 1.64% for the same period.
Thailand: SET Index ↓ 2.9%
The SET Index, Thailand’s main composite stock market index, also deflated 2.9% from Friday to a four year-low point of 1,524.15 by the end of Monday, 27 January.
The tumble came as the Chinese government banned outbound group tours with effect on Monday, with Tourism and Leisure components unsurprisingly taking the biggest hit.
Mainland Chinese tourists, the largest contributor of all foreign tourism receipts in the country at over 25%, spent almost US$18 billion in Thailand in 2019, according to Thai government data.
National air carrier Thai Airways saw share price plunge nearly 1.7% in late-afternoon trade on the day, before recovering at closing.
Central Pattana, the country’s largest retail property development group which owns CentralWorld mall, experienced as much as a 4.7% drop in share value on the day.
Thai airport operator Airports of Thailand PCL, which manages all six of Thailand’s international airports, opened a massive 4.9% lower on Monday morning.
South Korea: KOSPI Index ↓ 3.17%
Also making its concerns known was the Korea Composite Stock Price Index, which tripped 3.17% to start the post-virus week.
The index opened Tuesday at 2,192.22, its lowest start since 10 January.
National carrier Korean Air Lines led the selling frenzy, opening 8.07% lesser than the last closing on Thursday, 23 January.
Asiana Airlines, the country’s second largest airline, fared even worse, as it lost 9.44% in share price right out the gate.
Lotte Corporation, which owns shopping centres, hotels, amusement parks and entertainment venues all over South Korea, managed a less pronounced drawback of -3.97%.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Seize your opportunity
Deal on the world’s stock indices today.
- Trade on rising or falling markets
- Get one-point spreads on the FTSE 100
- Unrivalled 24-hour pricing
See opportunity on an index?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on an index?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from one point on the FTSE 100
- Trade more 24-hour indices than any other provider
- Analyse and deal seamlessly on smart, fast charts
See opportunity on an index?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.