South Korean stocks shattered over virus

Bloomberg

South Korean stocks bore the brunt of Asian stock declines tied to the new coronavirus on Tuesday as more markets opened after holidays and concerns spread from short-term consumerism to longer-term growth.
The benchmark Kospi plunged as much as 3.6%, set for the biggest decline since October 2018. Companies that had benefited from Chinese tourism took bigger
hits, with cosmetics maker Amorepacific Corp, travel agency Hana Tour Service Inc and Hotel Shilla Co all tumbling more than 10%. The moves mirrored drops in consumer and travel names in Japan and Thailand.
Market reaction to the virus may stall the nascent recovery in Korea’s tourism shares. After languishing for much of last year on strained relations with China, the sector had started to recover in January on optimism over improving bilateral relations.
“I guess it won’t be easy for tourism stocks to rebound for a while, as there have been concerns over the earnings outlook for the sector,” said Yoon Joonwon, a fund manager at HDC Asset Management in Seoul. “However, I might add some cosmetics names if they get oversold and appear to hit a bottom.”
Chinese tourists accounted for 35% of total foreign travellers to South Korea in November 2019, according to NH Investment & Securities. The economic impact could be much broader given the importance of China, the nation’s largest trading partner, to the export-driven South Korean economy.
Korea’s tech sector didn’t escape the damage on Tuesday, as chipmaker Samsung Electronics Co dropped over 3%. US peers slid, with tech giants including Apple, amid fears that the disease could crimp production in Wuhan.