Asia Markets: Asian markets continue to slump, as Nikkei enters correction territory

Asian stocks fell sharply lower in early trading Friday, as Japan’s Nikkei sank to into correction territory as coronavirus fears continued to rattle global markets.

The Nikkei plunged 4% NIK, -3.67% , bringing the index down 10.8% from recent highs. While new data showed Japan’s manufacturing output rose more than expected in January, economist Takeshi Minami warned output will likely decline until the outbreak is over — potentially not until summer, according to Reuters.

Prime Minister Shinzo Abe promised Friday he was willing to make policy moves in order to avoid economic damage. “If developments change, we’ll ensure to take steps as needed to prevent the virus from becoming a huge downside risk to Japan’s economy,” he told parliament, Reuters reported.

On Thursday, Abe asked all schools in Japan to close for a month in an effort to stop the spread of the virus. On Friday, Tokyo Disney Resort operator Oriental Land Co. 4661, +0.66% said it would close its theme parks for two weeks, per a request by the government to cancel or postpone major public events.

Hong Kong’s Hang Seng Index HSI, -2.42% fell 2.6%, while the Shanghai Composite SHCOMP, -3.71% slid 2.9% and the smaller-cap Shenzhen Composite 399106, -4.93% dove 3.6%. South Korea’s Kospi 180721, -3.30% tumbled 3%. Stocks inched up in Malaysia FBMKLCI, -1.52% , but sank in Taiwan Y9999, -1.24% , Singapore STI, -3.23% and Indonesia JAKIDX, -1.50% . Australia’s S&P/ASX 200 XJO, -3.25% retreated 2.9%.

Among individual stocks, Hitachi 6501, -5.83% , SoftBank 9984, -4.31% , Toyota 7203, -3.48% and Sony 6758, -3.87% dropped in Tokyo trading. In Hong Kong, Apple component maker AAC 2018, -6.59% slid, along with Geely Automobile 175, -5.97% , oil producer CNOOC 883, -4.47% and Wharf Real Estate 1997, -6.23% . Samsung 005930, -3.04% and LG Electrionics 066570, -3.21% fell in South Korea, while BHP BHP, -4.52% , Rio Tinto RIO, -3.47% and National Australia Bank NAB, -3.05% declined in Australia.

Fears of the coronavirus’ spread “have become full-blown across the globe as cases outside China climb,” DBS analysts Chang Wei Liang and Eugene Leow said in a report, according to the Associated Press.

New COVID-19 cases have sprung up around the globe in recent days, with trade and industry threatened by mass quarantines and shutdowns.

Goldman Sachs analysts on Thursday warned the outbreak could wipe out U.S. earnings growth this year, though they expect the S&P 500 to rebound by the end of the year.

Thursday on Wall Street, stocks plunged for a sixth straight day as all three benchmark indexes closed in correction territory, defined as a decline of at least 10%, but no more than 20%, from a recent peak.

The Dow Jones Industrial Average DJIA, -4.42% lost 1,190.90 points, or 4.4%, to close at 25,766.60, while the S&P 500 SPX, -4.42% shed 137.63 points, or 4.4%, to end at 2,978.76. The Nasdaq Composite COMP, -4.61% slumped 414.29 points, or 4.6%, closing at 8,566.48.

Benchmark U.S. crude CLJ20, -3.99% slid more than 2% in electronic trading on the New York Mercantile Exchange. The contract lost 3.4% on Thursday to settle at $47.09. Brent crude oil BRNJ20, -3.41% , the global benchmark, sank 2% to $51.19 per barrel in London after falling $1.25 on Thursday to $52.18 a barrel.

The dollar USDJPY, -0.82% fell to 108.94 yen from 109.58 yen Thursday.