Asian stocks quiet on Lunar New Year’s eve after a turbulent week

Asian markets were muted Friday on the eve of Lunar New Year celebrations, signaling caution after a broad sell-off the previous day over growing coronavirus fears.

Hong Kong’s Hang Seng Index, closed up nearly 0.2% Friday during a shortened trading session. Japan’s Nikkei 225 closed up 0.1%.

Chinese markets were closed, and won’t reopen until late next week.

The relative calm came a day after China’s Shanghai Composite posted its worst single-day percentage drop in more than eight months as the deadly coronavirus spread across the country, causing officials to place Wuhan, the central Chinese city where it originated, and two of its neighboring cities, under a partial lockdown.

The sell-off Thursday was “the most significant pre-[Lunar New Year] stock market rout on record,” said Stephen Innes, chief market strategist at AxiTrader, in a note to clients this week.

The shortened trading week was the Shanghai Composite’s worst since early August, when China allowed for a surprise devaluation of its currency, stoking fears about the US-China trade war.

The Hang Seng, meanwhile, lost 3.8% this week, its worst since mid-November when the city was rattled by violent, escalating protests.

China’s coronavirus problem is getting worse. As of Friday, the death toll from the disease had jumped to at least 26. More than 800 people have been infected, mostly in mainland China, though the disease has spread as far as the United States.

The World Health Organization said Thursday that it would not yet declare a global public health emergency over the virus.

That helped soothe traders’ jitters and provided markets with a sense of calm, Innes wrote Friday.

Still, investors are nervous that the crisis could stick around for a while.

“There are rising concerns that the economic impact could extend beyond the” Lunar New Year, analysts at Jefferies, wrote in a note Thursday.

Companies with headquarters or significant business in Wuhan and the surrounding area “may suffer the most,” they added.

According to Jefferies research, Chinese companies that are most exposed to fallout from the spread of the virus include Dongfeng Motor, a large Chinese auto group based in Wuhan. The company’s Hong Kong-listed shares fell 1.2% Friday.

Correction: An earlier version of this report incorrectly included South Korean markets, which are closed.