Japan and Singapore are on the brink of recession and South Korea on Friday said its exports to China slumped in the first 20 days of February as the outbreak upends global supply chains.
"Data suggests that a pickup in activity is still elusive, which could have negative implications on global growth," DBS Group Research said in a note.
Factories in China, Southeast Asia's largest trading partner, have struggled to return to work as authorities ramp up containment efforts, with officials saying that January and February exports and imports will be hit by the outbreak that has claimed more than 2,2000 lives.
Leading declines in the region, Thai shares fell as much as 0.8%, set for a fourth straight day of losses.
The index has lost nearly 3% so far this week as the epidemic weighs on tourist numbers, a big revenue generator for the region's second-largest economy.
Losses were dominated by the energy sector, dragged down by weaker oil prices, with PTT Pcl falling up to 2.2%.
Indonesian stocks dropped as much as 0.6%, with materials stocks leading losses. Cement maker PT Indocement Tunggal Prakarsa Tbk fell 2.9%.
Singaporean stocks edged lower and were on track to snap two weekly gains.
Oversea-Chinese Banking Corp, the city-state's second-biggest lender, traded flat even as it reported a better-than-expected quarterly profit.
Despite posting quarterly profits, Singaporean banks have been cautious about their growth outlook due to the epidemic. Last week, DBS Group Holdings flagged a 2% decrease in full-year revenue, citing the impact of the virus.
Shares in the Philippines and Malaysia ticked lower, while Vietnamese stocks were little changed.
By Arundhati Dutta
