Japan’s Nikkei 225 (N225) led declines among the region’s main indexes, closing down 2.7%. South Korea’s Kospi (KOSPI) fell 2.2%. Hong Kong’s Hang Seng Index (HSI) dropped 2.3%, and China’s Shanghai Composite (SHCOMP) declined 1.2%.
Most of those indexes are still positive for the week, but the wild swings over the past few days indicate how uncertain the unfolding outbreak has become. There are now nearly 98,000 confirmed cases of coronavirus worldwide, and almost 3,400 deaths. South Korea, Italy, Japan and Iran have become hotspots, recording the most cases outside of mainland China.
Friday’s losses in Asia followed a nearly 1,000-point drop for the Dow (INDU) overnight. The steep declines came after the index recorded two 1,000-point gains and an 800-point loss earlier this week.
The S&P 500 (SPX), meanwhile, fell 3.4% The benchmark is down 6.4% for the year.
As Asian markets fell Friday, so did US stock futures. Dow futures were last down 165 points, or 0.6%. S&P 500 and Nasdaq Composite (COMP) futures fell roughly 0.8% each, indicating that the pessimism may carry over into New York again on Friday.

Investors, meanwhile, have started plowing their money into safe haven assets as fears take hold. Gold settled up 1.5% at $1,666.40 an ounce on Thursday. And the 10-year Treasury yield dropped during Asia hours to about 0.8%, a new all-time low.

“The economic impact of the coronavirus has always been about fear of the virus,” wrote Stephen Innes, chief market strategist at AxiCorp, in a Friday research note. “Markets have shifted from pricing temporary China weakness to a more protracted global event, which will see a good chunk of global GDP go up in smoke.”

On Friday, S&P Global Ratings said it downgraded its economic outlook for Asia Pacific, saying the coronavirus could wipe $211 billion from household, corporate and government incomes and slow economic growth in the region to 4% for the year. The ratings agency had earlier forecast growth of 4.8%.

“Our U-shaped recovery has been pushed back to later in 2020 due to a harder hit to China’s economy in the first quarter, viral transmission outside China, and tighter financial conditions,” the S&P economists wrote, referring to a slower return to economic activity as opposed to a fast V-shaped recovery that some economists had hoped for last month.

The ratings agency also forecast that China’s economy will likely grow by just 4.8%, and said economic growth could slump even more if coronavirus infections in the country spike as people return to work and governments reintroduce restrictions on activity.

The growing global outbreak will deliver shocks to Japan and South Korea’s domestic supply and demand, they said, adding that it will also result in weaker demand from the United States and Europe.

Innes, of AxiCorp, noted that some industries are expecting steep losses as the outbreak rages on.

Global airlines stand to lose $113 billion in sales if the coronavirus continues to spread, according to the latest assessment from the International Air Transport Association. Just two weeks ago, IATA had been expecting lost sales in the range of $30 billion.

Laura He contributed to this report.

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