February 27, 2020 / 9:16 AM / in a month

Japan shares slide for fourth day as pandemic fears grow

TOKYO, Feb 27 (Reuters) - Japan’s benchmark Nikkei fell for a fourth day on Thursday, as investors were spooked by the rapid expansion of the global coronavirus outbreak, with the United States reporting its first possible community spread.

The Nikkei share average tumbled 2.13% to a 4-1/2-month low of 21,948.23, finishing below a major support of its 200-day moving average, at 22,195, for the first time since early September.

Analysts say the Nikkei could be supported at around 20,500, where it will be traded on par with its book value.

The broader Topix lost 2.37% to 1,568.06, the lowest finish since Sept. 10, with trading volume topping three days in a row, the first time in more than a year.

Investors are increasingly worried that the virus, which has already caused massive economic disruption in China, is becoming a pandemic.

The U.S. Centers for Disease Control and Prevention confirmed an infection of the new coronavirus in California in someone who had not travelled outside the United States or been exposed to a person known to have the virus.

“The coronavirus is no longer an Asian issue. It has now reached five continents. People initially thought the January-March earnings will be hit but it will be over in April-June. That now is being called into question,” said Hozumi Takuya, global investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

As investors’ concerns grow, the Nikkei volatility index , a gauge of investors’ expectations on future market fluctuations, short up to 31.40, the highest since December 2018.

In a sign of broad selling, all of the Tokyo Stock Exchange’s 33 industry subindexes fell, led by a 4.9% drop in the air transport index.

ANA Holdings fell 5.3%, while Japan Airlines lost 4.5%, both hitting multi-year lows.

Brokerage shares, highly sensitive to economic cycles, followed with a decline of 4.3%, with Nomura Holdings down 4.3% and Daiwa Securities Group losing 4.9%.

The index of Mothers start-up shares dropped 4.3% to a four-year low.

On the other hand, food delivery services firms were one of the few bright spots, with Fundely gaining 2.5%.

Kyorin Holdings surged 10.7% following a report that its subsidiary has developed a coronavirus test kit that can cut test time to less than 30 minutes from current 6 hours. (Editing by Jacqueline Wong)

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