Stocks in Asia declined in Monday afternoon trade, as investors monitor the ongoing virus outbreak's impact on Chinese manufacturers. Factories in China were set to return to work on Monday, but many are expected to remain shut for longer.
Mainland Chinese stocks were lower by the afternoon, with the Shanghai composite down 0.39% and the Shenzhen component 0.22% lower. The Shenzhen composite also shed 0.204%. Hong Kong's Hang Seng index slipped 0.77%.
The moves came following the release of Chinese inflation data for January. China's producer price index gained 0.1% in January, Reuters reported Monday citing official data. Consumer prices also rose 5.4% year-on-year, higher than a 4.9% increase expected by analysts in a Reuters poll.
In Japan, the Nikkei 225 slipped 0.52% in afternoon trade while the Topix index declined 0.65%. South Korea's Kospi also fell 0.63%.
Meanwhile, the S&P/ASX 200 in Australia shed 0.11%.
Overall, the MSCI Asia ex-Japan index was 0.5% lower.
Supply chains disrupted
Developments on the ongoing coronavirus outbreak continue to be watched, with the death toll from the disease overtaking that of SARS over the weekend.
Factories in China are scheduled to reopen on Monday after an extended holiday because of efforts to control the new coronavirus, though many are expected to remain shut for longer.
That could mean further disruptions to supply chains for many companies. Quarantines and other measures put in place to contain the outbreak could continue to disrupt electronics manufacturing well into the 2020 holiday season, even if factories quickly return to full production, manufacturing experts said.
"Hubei province, the centre of the coronavirus outbreak, is one of China's major manufacturing hubs, specializing in steel, automobile, and electronics," analysts at Singapore's DBS Group Research wrote in a note.
"Most Asian economies import 20-30% of their intermediate goods from China," the analysts said. "This underscores a vulnerability to the supply chain if the pandemic causes production and shipment halts."
Shares of Taiwan-listed Hon Hai Precision Industry, better known as Foxconn and the world's largest iPhone assembler, were watched amid concerns its factories in China may not open on Monday as previously planned. That could potentially hit Apple and some analysts have already reduced their iPhone shipment predictions earlier this month.
On Monday, Reuters reported citing a person with direct knowledge that Foxconn received approval to resume production at a plant in the Chinese city of Zhengzhou. The source told Reuters that Foxconn executives were "trying very hard" to negotiate with authorities to continue production in other parts of the country.
While Foxconn did not outright confirm that its plans to restart operations have been delayed, it previously told CNBC in a statement: "The operation schedules for our facilities in China follow the recommendations of the local governments, and we have not received any requests from our customers on the need to resume production earlier."
Shares of Hon Hai Precision Industry slipped 0.84% in the afternoon.
Currencies and oil
The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 98.644 after rising from levels below 97.6 last week.
The Japanese yen traded at 109.75 per dollar after seeing an earlier high of 109.55. The Australian dollar changed hands at $0.6698 after declining from highs above $0.672 last week.
Oil prices were lower in the afternoon of Asian trading hours, with international benchmark Brent crude futures down 0.2% to $54.36 per barrel. The U.S. crude futures contract also shed 0.18% to $50.23 per barrel.
— CNBC's Eunice Yoon and Kif Leswing contributed to this report.
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Chinese stocks decline as investors monitor the virus' potential impact on manufacturing - CNBC
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