TOKYO (REUTERS) - Asian shares fell on Wednesday (Feb 26) as a United States warning to Americans to prepare for the possibility of a coronavirus pandemic drove another Wall Street rout and pushed yields on safe-haven Treasuries to record lows.
The S&P 500 and the Dow Jones Industrial Average both shed more than 3 per cent on Tuesday in their fourth straight session of losses.
In Singapore, the Straits Times Index had lost 25.23 points or 0.8 per cent as of 9.40am.
It was a sea of red too for the rest of Asia - Tokyo was down 1.6 per cent, Shanghai 1.1 per cent, Hong Kong 1.2 per cent, Sydney 2 per cent and Seoul 1.5 per cent.
Yields on 10-year and 30-year US Treasuries teetered near record lows as worries about the economic impact of the virus outbreak boosted safe-haven assets.
Oil prices recovered some recent losses in Asia, but there are lingering concerns that expected output cuts by major oil producers will not be enough to offset a decline in global energy demand caused by the virus.
The World Health Organisation says the epidemic has peaked in China, but concern that its spread is accelerating in other countries is likely to keep investors on edge.
"What we are seeing is share markets are playing catch up," said Mr Michael McCarthy, chief market strategist at CMC Markets in Sydney.
"Other asset markets have been flashing warning signs for weeks. A corrective bounce in equities is possible, but we still have a lot of downward momentum."
While the stock rout has been global, the recent pace of selling in Asia has not been as severe as it has on Wall Street, which has been hit hard by the escalation of virus cases outside of Asia.
The S&P 500 lost US$2.14 trillion (S$3 trillion) in market capitalisation over the last four sessions, according to S&P Dow Jones Indices analyst Howard Silverblatt.
US stock futures rose 0.5 per cent in Asia on Wednesday, but that did little to brighten the mood.
Adding to recent fears was an alert from the US Centres for Disease Control and Prevention on Tuesday warning Americans to prepare for the spread of coronavirus in the United States, signalling a change in tone for the Atlanta-based US health agency.
The virus has claimed almost 3,000 lives in mainland China but has spread to dozens of other countries. Of increasing concern to investors, however, is the rising death toll in other countries.
Drastic travel restrictions slammed the brakes on China's manufacturing and consumer spending, and there are worries other countries will face similar disruptions.
The yield on benchmark 10-year Treasury notes traded at 1.3521 per cent on Wednesday in Asia, close to a record low of 1.3070 per cent. The 30-year yield stood at 1.8274 per cent, above a record low of 1.7860 per cent.
The decline in yields weighed on the dollar. The greenback was last quoted at 110.25 yen, continuing a pullback from a 10-month high of 112.23 yen.
The dollar traded at US$1.0877 per euro, off an almost three-year high of US$1.0778 reached on Feb 20.
US crude ticked up 0.58 per cent to US$50.19 a barrel. The Organisation of the Petroleum Exporting Countries (Opec) and allies including Russia, a group known as Opec+, have been sending signals that they will cut output further.
However, oil could come under more pressure as weekly US supply reports due later on Wednesday are expected to show a rise in inventories, according to a Reuters poll.