Business

Asian markets close the week with losses amid coronavirus fears

Posted January 30, 2020 9:35 p.m. EST
Updated January 31, 2020 4:30 a.m. EST

— Hong Kong stocks plunged nearly 6% this week as the the spread of the coronavirus took its toll on markets.

The Hang Seng Index closed Friday 0.5% lower to finish down for a third straight session. It was closed the first two days of this week for the Lunar New Year holiday.

Elsewhere, South Korea's Kospi dropped 1.4% on Friday, pushing its weekly loss to 5.7%. Japan's Nikkei 225 ended Friday 1% higher, but is also down for the week.

The coronavirus, which originated in central China, has now spread around the world. More than 200 people are dead and more than 9,600 people have been infected in mainland China. There have also been dozens of confirmed cases elsewhere, including India, the Philippines and the United States.

The World Health Organization has declared coronavirus a public health emergency of international concern.

Separately, China's factory activity weakened ahead of the coronavirus outbreak, according to official data released Friday. The purchasing managers index for manufacturing reached 50 this month, lower than last month's 50.2 but in line with what analysts polled by Reuters expected.

Non-manufacturing PMI, a key indicator for the services sector, rose to 54.1, which was above December's 53.5.

A reading above 50 indicates growth from the previous month.

"The PMIs are usually valued as being among the first pieces of data released for an economy each month. But China's January PMI surveys have been overtaken by subsequent events," wrote Martin Lynge Rasmussen, China economist for Capital Economics, in a research note. "The following months' PMIs will give insight into how damaging the virus is."

He noted that the PMI surveys ended January 20, the same day Chinese President Xi Jinping publicly stated that the outbreak was serious.

Elsewhere, South Korean electronics maker LG reported sales of 62.3 trillion won ($52.5 billion) in 2019, a rise of 1% compared to 2018. Operating income fell about 1% to 2.4 trillion won ($2 billion).

Earnings were dragged down by the poor performance of LG's smartphone division. Sales of LG phones for 2019 plummeted 21% to 1.3 trillion won ($1.1 billion).

Shares in LG dropped 1.9% in Seoul on Friday.

SK Hynix, which supplies chips to smartphone maker Apple and others, saw profits collapse in the fourth quarter and miss analysts' estimates by a wide mark.

Operating profit plummeted 95% to 236 billion won ($199 million), the company's worst quarterly profit in seven years and far below what analysts expected, according to Refinitiv.

SK Hynix stock fell 0.5% in Seoul.

-- Sherisse Pham contributed to this report.

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