Tokyo stocks close lower for second day on virus fear

Tokyo stocks suffered further losses on fears over the widening coronavirus outbreak in China that has killed more than 100 and fanned fears about the global economic impact. The benchmark Nikkei 225 index fell 0.55 percent, or 127.80 points, to 23,215.71 extending Monday's more than two percent drop-while the broader Topix index was down 0.60 percent, or 10.29 points, at 1,692.28.

"Drops in the US market by a large margin, on concerns over the spread of the new virus... accelerated risk-off sentiment, weighing on the Japanese market today again," Yutaka Masushima, market analyst at Monex, said in a commentary.

The virus, which can cause a pneumonia-like acute respiratory infection, has in a matter of weeks killed 106 people and infected more than 4,500 in China, while cases have been identified in more than a dozen other countries.

The virus has caused global concern because of its similarity to Severe Acute Respiratory Syndrome (SARS), which killed hundreds across mainland China and Hong Kong in 2002-2003 and was also traced to the trade in wild animals.

Panicked investors in the global market fled risky assets for safer bets such as gold, bonds and the yen, after China warned that the virus was spreading fast.

The dollar fetched 109.03 yen in Asian afternoon trade against 108.88 yen in New York late Monday. In Tokyo, Japan Airlines continued its slide, falling 0.38 percent to 3,122 yen, but ANA Holdings gained 0.34 percent to 3,453 yen following a sharp decline the previous day.

Exporters were mixed, with Sony dropping 1.16 percent to 7,773 yen and Toyota down 0.06 percent at 7,747 yen. But Nintendo gained 0.47 percent to 42,600 yen and Nissan rose 0.25 percent to 599.2 yen.

The positive sentiment helped Wall Street to chalk up more records, though there are worries the upward momentum could slow and gains could trigger some profit-taking soon. Still, traders remain upbeat and Tokyo ended the morning up 0.3 percent, while Shanghai and Sydney each gained 0.3 percent. Seoul piled on more than one percent while Taipei was also up.

But Hong Kong struggled to build on last week's advances and was slightly lower in the morning, with Singapore, Jakarta and Manila also in the red.

However, AxiTrader's Stephen Innes said the general outlook was for further rises. "There's a belief that global growth will continue to pick up speed over the coming months, as significant downside risks to the global economy have been turned aside, and worries over a possible recession have diminished, with the data giving credence to the possibility," he said in a note.

Oil prices rose more than one percent on supply concerns after exports from Libya, which has been riven by fighting between rival factions since a 2011 NATO-backed uprising, were blocked after a pipeline was shut down by armed forces. And in Iraq, which is OPEC's second biggest producer, a strike at a key oil field hit output.

There are also fears that long-simmering tensions could explode into major unrest, with matters not helped by the assassination in the country this month of Iran's top general.

Wall Street stocks again finished at records on Friday, capping a positive week of trade-related news and mostly solid corporate earnings.

The Dow Jones Industrial Average ended up 0.2 percent at 29,348.10.

The broad-based S&P 500 gained 0.4 percent, closing at 3,329.62, while the tech-rich Nasdaq Composite Index advanced 0.3 percent to 9,388.94.

Construction of new US housing shot to a 13-year high last month, according to Commerce Department data that added to positive investor sentiment following the US-China trade deal signed earlier in the week and a round of banking earnings that mostly topped expectations.

US stocks had also finished at all-time highs Thursday.