The death toll from the virus in China rose to 106 from 81, a day earlier and cases of the virus were confirmed across 10 countries.
Risk sentiment was dampened by the virus' rapid progress even as China ramped up preventive measures, imposed travel restrictions and stretched out the Lunar New Year holidays to contain the spread of the virus.
The massive jump in outbound Chinese tourists since 2002, the fact that the coronavirus is infectious during incubation and its unknown origins are the most worrisome factors, said Vishnu Varathan, senior economist at Mizuho Bank, in a note.
Singapore stocks pared early losses to close about 1.8% lower, with lender DBS Group Holdings shedding more than 1.3% and conglomerate Jardine Matheson Holdings JARD.SI down about 1.9%.
Flag-carrier Singapore Airlines dropped 2.9% to close at its lowest since April 2003.
Earlier in the session, shares of the travel and tourism hub fell to an over 8-month low after trade minister Chan Chun Sing said the government expects an impact on its economy.
Singapore, which is heavily reliant on Chinese nationals for tourism, recorded its lowest growth rate in a decade last year.
Malaysian shares closed 1.4% lower to register their sixth straight session of losses. Tourist-dependent Malaysia Airports Holdings slipped steeply, falling 6.7% to its lowest close since February 2017.
Top Glove Corp, the world's largest manufacturer of gloves, added nearly 8.3% to end at its highest in over a year, as the company continued to benefit from hopes of a rise in demand for rubber gloves due to the virus outbreak.
Hartalega Holdings, a nitrile glove maker, rose 3.7%, while hospital owner IHH Healthcare IHHH.KL climbed 1.7%.
Philippine shares closed over 1.5% lower, with financials weighing heavily on the index.
Thai markets edged down to clock their seventh consecutive session of losses. However, the fall was relatively small as the bourse had shed nearly 3% in the previous session, when most markets were shut for the Lunar New Year holiday.
By Arpit Nayak
