Stocks in major Asia Pacific markets tumbled on Wednesday as investors continued to watch for developments around government stimulus with the coronavirus continuing to spread.

Stocks in Australia also saw sharp declines as the S&P/ASX 200 dropped 3.6% to close at 5,725.90. The day’s moves left the index in bear market territory, meaning it was more than 20% lower than its 52-week high.

South Korean stocks were also among the biggest losers among major markets regionally, with the Kospi plunging 2.78% to close at 1,908.27 while the Kosdaq index fell 3.93% to end its trading day at 565.61.

Shares in Japan also fell on the day, as the Nikkei 225 slipped 2.27% to 19,416.06 while the Topix index declined 1.53% to 1,385.12.

Mainland Chinese stocks slipped by the close as well, with the Shanghai composite 0.94% lower at about 2,968.52 and the Shenzhen component down 1.78% to 11,200.05 while the Shenzhen composite shed 1.481% to approximately 1,859.40.

In Hong Kong, the Hang Seng index was 0.75% lower, as of its final hour of trading.

Shares of Cathay Pacific jumped more than 2% despite the company posting in its 2019 annual results a 27.9% year-on-year plunge in its profit attributable to shareholders. Commenting on the prospects for the airline, Cathay Pacific Chairman Patrick Healy said the earnings release that it expected to “incur a substantial loss for the first half of 2020” as travel demand has “dropped substantially.”

Overall, the MSCI Asia ex-Japan fell 1.14%.

National Australia Bank’s (NAB) Tapas Strickland warned in a Wednesday morning note that markets are “likely to remain volatile” as headlines around the coronavirus “continue to be on the negative side.”

Strickland, who is a director of economics and markets at the Australian lender, cited reports of the number of coronavirus cases in Italy spiking past 10,000 as well as Centers for Disease Control and Prevention Director Robert Redfield’s comments that certain areas of the U.S. are currently in “high mitigation” rather than containment.

Concerns surrounding the global coronavirus outbreak have sent markets on a roller-coaster ride in recent days. The disease has infected at least 113,851 and taken more than 4,000 lives so far, according to the latest figures from the World Health Organization.


Economic stimulus watch

As investors watch for stimulus measures by governments to combat the coronavirus’ impact, Australia’s government announced on Wednesday a 2.4 billion Australian dollar (approx. $1.56 billion) health package that it said would provide “unprecedented support across primary care, aged care, hospitals, research and the national medical stockpile.”

Meanwhile, a White House official told CNBC that U.S. President Donald Trump pitched a 0% payroll tax for employers and employees for the rest of the year during a meeting with Republican lawmakers on Capitol Hill Tuesday. Japan also unveiled a package worth about $4 billion on Tuesday to cope with the coronavirus outbreak, according to Reuters.

“I think we’re waiting for government policy response, for fiscal policy to kick in and so I think the markets are looking for a fiscal policy response across many economies,” Stephen Halmarick, head of global markets research at Commonwealth Bank of Australia, told CNBC’s “Capital Connection” on Wednesday.

“Fiscal policy response, from the large economies around the world, would be a very welcome thing,” Halmarick said.


Airlines flag troubles

Major airlines in Asia plummeted on Wednesday as they flagged concerns over the impact of the virus spread.

In Australia, shares of Qantas Airways plunged 9.21% on Wednesday after the firm announced on Tuesday “further cuts” to its international flights, with capacity being reduced by “almost a quarter for the next six months.” The airline said the cuts came following “a sudden and significant drop in forward travel demand” as the coronavirus spreads into Europe and North America.

Over in Hong Kong, shares of Cathay Pacific jumped about 2.5% as of its final hour of trading despite the company posting in its 2019 annual results a 27.9% year-on-year plunge in its profit attributable to shareholders.

Cathay Pacific Chairman Patrick Healy said in the earnings release: “Travel demand has dropped substantially and we have taken a series of short term measures in response. These have included a sharp reduction of capacity in our passenger network.”

Still, Healy said the carrier expects to “incur a substantial loss for the first half of 2020.”

NIKKEI Nikkei 225 Index NIKKEI 18412.24 -1003.82 -5.17
HSI Hang Seng Index HSI 24402.24 -829.37 -3.29
ASX 200 S&P/ASX 200 ASX 200 5389.90 -336.00 -5.87
SHANGHAI Shanghai SHANGHAI 2927.00 -41.52 -1.40
KOSPI KOSPI Index KOSPI 1832.99 -75.28 -3.94
CNBC 100 CNBC 100 ASIA IDX CNBC 100 7444.56 -245.03 -3.19

Overnight stateside, the Dow Jones Industrial Average closed 1,167.14 points higher at 25,018.16, cutting its Monday losses in half. The S&P 500 gained 4.9% to end its trading day at 2,882.23 — its best day since Dec. 26, 2018. The Nasdaq Composite also jumped 4.9% to close at 8,347.40.


Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 95.918 after an earlier high of 96.396.

The Japanese yen, often seen as a safe-haven currency, traded at 104.41 per dollar after touching an earlier low of 105.67. The Australian dollar was at $0.6496 after its slip yesterday from levels above $0.657.

Oil prices were mixed in the afternoon of Asian trading hours, with international benchmark Brent crude futures advancing fractionally to $37.25 per barrel. U.S. crude futures, on the other hand, slipped 0.2% to $34.29 per barrel.