SEOUL (Reuters) - South Korean airline and hotel shares dropped on Monday while drugmakers soared, as investors bet on an outbreak of Middle East Respiratory Syndrome (MERS) scaring off tourists and spurring demand for medical supplies.
The health ministry reported three more MERS cases on Monday, taking South Korea's total to 18 since the first confirmation on May 20.
On Friday, a Korean man was confirmed as China's first case after travelling to the country via Hong Kong with Asiana Airlines Inc. None of 64 people quarantined after contact with the man tested positive, state media reported.
MERS, first identified in humans in 2012, is caused by a coronavirus from the same family as the one that triggered the 2003 epidemic of Severe Acute Respiratory Syndrome (SARS). It appears to be transmitted via close contact, has no vaccine, and has caused at least 431 deaths globally, according to the World Health Organization.
In Hong Kong, 299 people died from SARS and tourism dropped almost 90 percent during the worst-hit months. Airline, retail and consumer stocks were hard hit along with the Hang Seng Index, while property prices were battered.
On Monday, Asiana shares fell as much as 11 percent before ending down 4.9 percent. Korean Air Lines Co Ltd closed 4.0 percent lower and Hotel Shilla Co Ltd ended down 0.8 percent after falling as much as 6.3 percent.
Amorepacific Corp, a cosmetics maker popular with Chinese tourists, finished down 4.1 percent and duty-free shop operator AK Holdings Inc fell 3.3 percent.
Meanwhile, medicine-related firms rallied, with GeneOne Life Science Inc and at least five others reaching the 15 percent daily limit.
"The impact will be bigger on industries catering to incoming tourists because the country is reported to have more confirmed cases than elsewhere in the region," said strategist Park Seok-hyun at Eugene Investment & Securities. "But as of now, I don't think there will be a massive sell-off unless there are many deaths."
In China, where state media said authorities are seeking 13 more people who had contact with the Korean man, 10 pharmaceutical firms hit the daily maximum of 10 percent, driving the healthcare index to a record high.
"I think this was certainly linked to the MERS case," said analyst Du Changchun at Northeast Securities in Shanghai.
Hong Kong shares were seemingly unaffected by the prospect of another outbreak. Researcher JL Warren Capital noted on Hong Kong-listed casinos that MERS fear could "negatively impact the tourism in Macau and therefore its casino traffic".
(Reporting by Choonsik Yoo; Additional reporting by James Pomfret, Ben Blanchard, Adam Jourdan and Farah Master; Writing by Christopher Cushing; Editing by Jeremy Laurence)