Japanese shares dropped on Tuesday, with airlines leading the decline as an outbreak of a new coronavirus has spread to more Chinese cities, stoking fears of a wider epidemic that could hamper the economic activity in the region.

Profit-taking was also ripe after the market hit a 15-month high the previous day, especially in recent gainers such as semiconductor-related shares.

The Nikkei share average fell 0.82% to 23,886.99 and the broader Topix lost 0.56% to 1,734.46 ahead of a central bank policy meeting outcome.

Airline shares dropped 1.6% to become the worst performing sector as the virus outbreak fanned worries that it will spread globally as Chinese travellers take flights abroad for the week-long holiday starting this week.

China’s health authorities said the virus can pass from person-to-person. Three other countries — Japan, South Korea and Thailand — have confirmed cases already.

Source: Reuters