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SHANGHAI, Jan 23 (Reuters) - China stocks fell about 3% onThursday, their biggest single-day loss in nearly nine months,as investors unloaded shares related to restaurants, cinemas,airlines and theme parks after a lockdown in the central city ofWuhan to curb a SARS-like virus.
Authorities in Wuhan, the epicentre of the new coronavirusoutbreak that has killed 17 and infected nearly 600 people, shuturban transport networks and suspended outgoing flights.
The drastic measures spooked investors who scrambled forsafe haven in bonds.
China's blue-chip index CSI300
The CSI300 index marked its worst week since May 2019, whilethe Shanghai benchmark fell the most on-week since August lastyear. China financial markets will be suspended on Friday forthe week-long Lunar New Year holiday.
The Hong Kong market
Selling intensified in afternoon trading as news trickled inabout fresh cases of infection across China, and cancellation ofentertainment events.
The market was dominated by fears of the Wuhan coronavirus,which stirs dark memories of the 2002-2003 SARS outbreak, saidLarry Hu, an economist at Macquarie Capital Ltd.
"We can't answer how severe it will be and when it willend," Hu wrote, adding "The worst is yet to come."
However, fundamentals will eventually rule for the year, asthe virus' impact on China's economy is "manageable andshort-lived," Hu argued.
It was not clear yet whether the virus would follow thesix-month life cycle of SARS, said Chi Lo, Greater Chinaeconomist at BNP Paribas Asset Management.
DOWNSIDE RISKS
The outbreak posed bigger downside risks in China'ssequential economic growth as consumption and the service sectoris a bigger part of the economy.
The sell-off was across the board, but most concentrated intransport and leisure sectors as people avoid interactions andoutdoor activities.
The healthcare sector was the only bright spot, as demandfor vaccines and health check-ups surged following the virusoutbreak, although no drugs can directly treat the flu-likesymptoms of the new coronavirus.
Airline shares continued to weaken, with Air China
Wanda Film
Bucking the trend, biotech firms and drugmakers surged withShandong Lukang Pharmaceutical Co
(Reporting by Shanghai Newsroom;Additional reporting by Noah Sin in Hong Kong;Editing by Sherry Jacob-Phillips) ((samuel.shen@tr.com))