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Stocks in Taiwan slumped 5% on Thursday, leading a selloff in Asia as investors returned from the Lunar New Year holiday to face mounting concerns the spreading coronavirus outbreak.
Fed chief Jerome Powell said Wednesday that the U.S. economy is in good shape, in announcing that the central bank left unchanged a key interest rate that influences borrowing costs. But he also said the Fed is closely monitoring the severity of the deadly coronavirus and the potential for the illness to disrupt the global economy.
Chinese authorities on Thursday said more than 7,700 people have fallen victim to the virus, with at least 170 dead. World Health Organization officials expressed “great concern” of the virus' spread outside of China. A U.N. panel is expected to meet Thursday to weigh if the outbreak should be declared a global emergency, the Associated Press reported.
Markets in mainland China remained closed for the Lunar New Year holiday, but Taiwan’s /zigman2/quotes/210597977/delayed TW:Y9999 +0.15% benchmark reopened with heavy losses, and the index slumped 5.7%, marked by a 10% drop for Apple manufacturer Hon Hai Precision Industry, better known as Foxconn /zigman2/quotes/204111604/delayed TW:2354 -0.19% . The company reportedly said that it had a plan in place to “continue to meet all global manufacturing obligations,” in the wake of the coronavirus.
Apple wants to boost its first-half production of iPhones by 10%, but has been reportedly warned by some suppliers that the virus outbreak could complicate those plans.
Japan’s Nikkei /zigman2/quotes/210597971/delayed JP:NIK +0.40% fell 1.7% and Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.28% dropped 2.3%, while South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +0.29% fell 1.5%. Samsung /zigman2/quotes/209800866/delayed KR:005930 +0.29% dropped over 3% in South Korea after posting a nearly 40% drop in quarterly net profit .
Singapore /zigman2/quotes/210597985/delayed SG:STI -0.06% , Indonesia /zigman2/quotes/210597981/delayed ID:JAKIDX +0.41% and Malaysia /zigman2/quotes/210598052/delayed MY:FBMKLCI -0.28% indexes declined. Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -0.53% dipped 0.5%.
Semiconductor-equipment maker Advantest /zigman2/quotes/206869087/delayed JP:6857 +0.27% sank in Tokyo trading, along with Casio /zigman2/quotes/202492162/delayed JP:6952 -2.08% and Canon /zigman2/quotes/207639533/delayed JP:7751 -1.08% . Apple component makers AAC /zigman2/quotes/201441510/delayed HK:2018 +2.72% and Sunny Optical /zigman2/quotes/206687505/delayed HK:2382 -0.58% fell in Hong Kong, where Sands China /zigman2/quotes/207609245/delayed HK:1928 -0.30% and Wharf Real Estate /zigman2/quotes/205885756/delayed HK:1997 +1.62% dropped as well.
“It’s going to be challenging to put concerns over the coronavirus to one side, but fortunately for risk, the robust data in the U.S. should at least be able to keep risk a wobbly but even keel,” wrote Stephen Innes, chief market strategist at AxiTrader.
On the heels of a steady session, U.S. stock futures pointed to a weaker session on Thursday, with futures for the Dow Jones Industrial Average /zigman2/quotes/210407078/delayed YM00 +0.21% , S&P 500 /zigman2/quotes/209948968/delayed ES00 +0.27% and Nasdaq-100 /zigman2/quotes/210219788/delayed NQ00 +1.00% all fell around 0.5% each.
Benchmark crude oil fell 1% to $52.80 a barrel. Brent crude oil , the international standard, fell 1% to $59.22.
The dollar /zigman2/quotes/210561789/realtime/sampled USDJPY -0.1678% slipped to 108.92 Japanese yen from 109.21 yen on Wednesday.