Reuters/Jason Lee

The Shanghai Composite Index and the Hang Seng plummeted on Thursday.

Traders sell on virus outbreak fears before markets close for the Chinese New Year holiday.

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Stocks in China plunged on Thursday as Chinese authorities locked down three cities, halted transportation, and shuttered businesses in a bid to contain the fast-spreading coronavirus that has already infected close to 600 people and killed 17.

In China, the Shanghai Composite slumped 2.8% and the SZSE Component dropped 3.5%. Similarly, Hong Kong's Hang Seng fell 1.5% and Japan's Nikkei fell 1%.

Traders rushed to sell before markets close for the Chinese New Year holiday.

Airline stocks lost altitude with Air China down 4.4%, China Eastern Airlines down 3.4%, and China Southern Airlines down 3.7%. Media stocks also suffered with Wanda Film down 7% and Beijing Enlight Media down 5%.

Healthcare stocks soared as investors anticipated higher demand for drugs, masks, and other medical products. Shandong Lukang Pharmaceutical, Jiangsu Sihuan Bioengineering, and Jiangsu Lianhua Pharmaceutical jumped by 10%, their daily limit.

"The sectors most likely to be impacted are tourism, retail sales, and airlines," Seema Shah, chief strategist at Principal Global Investors, said in a morning note. "Healthcare and pharmaceuticals are clear beneficiaries."

Chinese authorities locked down Wuhan, the city at the center of the outbreak, canceling outbound trains and flights and halting public transportation. They also locked down Huanggang and Ezhou, two cities with about 7.5 million and 1 million residents each, according to The Wall Street Journal.

In Huanggang, authorities shuttered cinemas and internet cafes, closed a central market, and introduced inspections of people and cars entering and leaving the city center, The Journal reported. Ezhou plans to roll out similar restrictions, the newspaper said.

Analysts fear the virus could spread farther this weekend as hundreds of millions of Chinese travel to celebrate the Lunar New Year.

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