By Chong Koh Ping 

Stock markets in Asia fell, tracking steep selloffs in U.S. and European markets, on growing concerns about the potential economic costs of the coronavirus epidemic.

By late Wednesday morning in Singapore, most regional indexes were lower. Japan's Nikkei 225 had fallen 1.9%, reaching its lowest levels since October, while Australia's S&P/ASX 200 had shed 2.2% and Korea's Kospi retreated 1.2%.

"The market is pricing in a significant slowdown in global growth and corporate earnings," said Ong Zi Yang, senior macro analyst at FSMOne.com in Singapore. "It is hard to quantify the economic impact now but there will definitely be a slowdown," he said.

Elsewhere in the region, Hong Kong's Hang Seng Index retreated 0.8%, and the Shanghai Composite ebbed 0.2%.

Deaths and confirmed cases of the coronavirus have continued to climb outside China--notably in Italy, Iran, Japan and South Korea. On Tuesday, the U.S. Centers for Disease Control and Prevention warned American businesses, hospitals and communities to prepare for potential outbreaks in the country.

On Tuesday, the Dow Jones Industrial Average fell 3.1% to end at its lowest level since October. Other major U.S. indexes shed similar amounts, while the yield on the 10-year U.S. Treasury note dropped to a record low and U.S. crude-oil prices tumbled below $50 a barrel.

"This is a classic case of risk aversion," said Kelvin Tay, regional chief investment officer at UBS Global Wealth Management in Singapore, who added that markets were likely to remain volatile.

Mr. Tay pointed to rallies in gold and U.S. government bonds, and said it was also difficult for Asian markets to perform well when regional currencies were weak.

The U.S. dollar has strengthened against many currencies in 2020, with the WSJ Dollar Index rising about 2.8% this year.

S&P 500 futures rose slightly in after-hours trading, suggesting U.S. indexes could regain some ground Wednesday.

(END) Dow Jones Newswires

February 25, 2020 23:09 ET (04:09 GMT)

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