January 27, 2020 / 2:13 AM / a month ago

Nikkei drops, tourism shares hit by China virus concerns

TOKYO, Jan 27 (Reuters) - Japanese shares tumbled on Monday, with tourism-related stocks taking a fresh hit, on fears that a virus outbreak originating from China could be more deadly and harder to contain than initially thought.

As of 0155 GMT, the Nikkei share average was down 1.68% at 23,426.58, turning negative on the year, while the broader Topix lost 1.37% to 1,706.77.

China's cabinet said it would extend the week-long Lunar New Year holiday by three days to Feb. 2 in a bid to contain the spread of the disease as the death toll rose to 80.

Popular places such as amusement parks and cinemas are closing down in some places, while the city of Wuhan, the epicentre of the outbreak, is under virtual lockdown with severe restrictions on movement in several other cities.

"While we can't tell how much the disease will spread, one thing we can say for sure now is that consumption in China is already taking a hit as Beijing tries to contain the epidemic," said Hiroyuki Ueno, senior strategist at Sumitomo Mitsui Trust Asset Management.

The Chinese government had announced prohibition of outbound packaged tour travel for Chinese travellers, denting shares of Japanese companies that have benefited from a rising influx of Chinese tourists.

Airline shares subindex fell 3.8% to their lowest since May 2017.

Shares of Oriental Land dropped 7%, following a Nikkei report that the operator of Tokyo Disney Resort is likely to post its first fall in profit in three years in the nine months ended December.

Travel and leisure firm H.I.S. fell 6%, while Keisei Electric Railway, which runs trains to Tokyo's Narita Airport from the city centre, shed as much as 4.6%.

Cosmetic makers were also affected as their top-line has been boosted by Chinese demand, with Shiseido down 5.5% and Kose declining 5.9%.

On the other hand, protective outfit maker Azearth and Airtech Japan, who manufacture various apparatus for hospitals to prevent infections, rose by daily limit, rising 23.7% and 17.1% respectively.

Niitaka, which makes disinfectors, also gained 21.6%.

Elsewhere, Net One System, which has been reported to have spearheaded fictitious transactions involving several companies to pad profit, sank 22.2%.

The company said last week it will delay its quarterly earnings by two weeks to Feb. 13 after having found suspicious transactions. (Reporting by Hideyuki Sano, Editing by Sherry Jacob-Phillips)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below