Wall Street equities tumbled overnight as China stepped up preventive measures, imposed travel restrictions and extended the Lunar New Year holidays to limit the spread of the virus.
Doubts have emerged whether Beijing can contain the virus that has spread to more than 10 countries as the death toll in China rose rapidly to 106 from 81 a day earlier.
"Given that China has rapidly increased its role in the global supply chains, the market continues to price in the worst case, negative growth shock scenarios," Stephen Innes, Asia Pacific Market Strategist at AxiCorp, wrote in a note.
"At this juncture, traders are still very much uncertain about which road to take (trade or fade), but there remains a growing sense in the market that contagion levels could get worse before they get better."
Financials and industrials took the biggest hit in Singapore as the city-state announced new measures to tackle the virus.
Trade minister Chan Chun Sing said the government was considering support measures for hard-hit sectors like tourism.
The travel and tourism hub has so far reported four cases of the virus, prompting a new advisory for travellers to postpone all non-essential travel to mainland China.
Lender DBS Group Holdings shed more than 2.5% and conglomerate Jardine Matheson Holdings was down over 4%.
Among other losers, Malaysian shares fell over 1% and were headed for a sixth consecutive session of losses.
Tourism-dependent Malaysia Airports Holdings plunged as much as 9.5% to its lowest since February 2017 and was on course for a sixth straight session of losses.
Among the few gainers was Top Glove Corp, the world's largest manufacturer of gloves. The stock jumped 10% to its highest in more than a year after a 16% gain last week, as the company continues to benefit from hopes of a surge in demand for rubber gloves due to the virus outbreak.
Hartalega Holdings, a nitrile glove maker, rose 6.8%, while hospital owner IHH Healthcare climbed 2.6%.
By Arpit Nayak
