Shares take hit as virus outbreak slams profits, events

National / World

People walk past an electronic stock board showing Japan’s Nikkei 225 index at a securities firm in Tokyo Tuesday, Feb. 18, 2020. Shares have fallen in Asia as the impact from the virus outbreak that began in China deepened, with Apple saying it would fail to meet its profit target and China moving to cancel major events including the Beijing auto show. (AP Photo/Eugene Hoshiko)

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BANGKOK (AP) — Shares slipped in Europe and Asia on Tuesday as the impact from the virus outbreak that began in China deepened, with Apple saying it would fail to meet its profit target in this quarter and China moving to postpone or cancel major events, including the Beijing auto show.

Britain’s FTSE 100 dropped 0.4% to 7,404.04, while the CAC 40 in Paris declined 0.7% to 6,041.20. Germany’s DAX lost 0.8% to 13,674.95. The future contract for the S&P 500 lost 0.3% while the Dow future was down 0.4%. U.S. markets were closed Monday for President’s Day.

As the outbreak persists, bringing new travel advisories and disrupting trade, travel and supply chains, it is casting a widening shadow over the regional economy.

South Korean President Moon Jae-in said Tuesday that the coronavirus crisis has put the country’s economy in an “emergency situation” and called for aggressive efforts to support companies dependent on trade with China and prompt up consumption.

In a Cabinet meeting, Moon said there’s an “absolute need for the government to employ extraordinary measures by utilizing every method it could take” to ease the economic impact of the outbreak.

Governments around the region have cut interest rates, extended tax breaks and taken other measures to cushion the blow to businesses from plunging tourism and disrupted supply chains.

“Best to buckle in as we could be in for a bumpy ride the next few weeks as I’m struggling to find any research report that doesn’t suggest: “Covid-19 could significantly affect short term earnings: Reiterate Sell,” Stephen Innes of AxiCorp said in a report.

China reported 1,886 new virus cases and 98 more deaths in its update Tuesday. A report saying the disease outbreak has caused a mild illness in most people raised optimism among global health authorities.

China’s biannual auto show, one of the industry’s biggest international events, has been postponed, and many sports and entertainment events have been delayed or canceled to avoid travel that may spread the virus. The death toll from the outbreak rose to 1,868, with confirmed cases totaling 72,436.

But China looks likely to postpone its annual congress, the biggest political meeting of the year. The standing committee for the National People’s Congress will meet Feb. 24 to deliberate postponing the meeting that is due to start March 5.

Japan’s Nikkei 225 index lost 1.4% to 23,193.80, while the Hang Seng in Hong Kong lost 1.5% to 27,530.20. In South Korea, the Kospi shed 1.5% to 2,208.88. The Shanghai Composite index erased early losses to edge 0.1% higher to 2,984.97. Australia’s S&P ASX/200 fell 0.2% to 7,113.70. India’s Sensex skidded 0.9% to 40,699.65.

Apple Inc. joined the growing number of companies who are forecasting a hit to their bottom lines from the outbreak, which has prompted Chinese authorities to put into lockdown cities that are home to more than 60 million people.

Apple warned its investors on Monday that it won’t meet its second-quarter financial guidance because the outbreak has cut production of iPhones. The Cupertino, California-based company said all of its iPhone manufacturing facilities are outside Hubei province, the epicenter of the outbreak, and all have been reopened. But production is ramping up slowly.

“The health and well-being of every person who helps make these products possible is our paramount priority, and we are working in close consultation with our suppliers and public health experts as this ramp continues,” Apple said in a statement.

Technology shares are taking a beating. Samsung Electronics’ shares fell 2.8% on Tuesday, while Sony Corp. fell 2.5% and computer chip maker TMSC dropped 2.9%.

In other trading, benchmark U.S. crude oil lost 68 cents to $51.37 per barrel in electronic trading on the New York Mercantile Exchange. It gained 63 cents overnight to $52.05 per barrel. Brent crude oil, the international standard, lost 89 cents to $56.79 per barrel. It gained 35 cents on Monday to $57.67.

In currency markets, the dollar fell to 109.73 Japanese yen from 109.89 yen on Monday. The euro edged down to $1.0828 from $1.0836.

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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