Travel-related stocks slumped on concern about falling demand for flights and hotel bookings after a Singaporean man tested positive for SARS.
The first outbreak in March killed 333 people in Singapore and Hong Kong, or more than a third of total fatalities.
Singapore's economy shrank 11.4 percent, while Hong Kong's contracted 3.7 percent in the April-June quarter from the previous three months.
"It's bad whenever it has to do with SARS," said Teo Chon-kiat, who helps manage the equivalent of US$1.4 billion in Asia, excluding Japan, at DBS Asset Management Ltd in Singapore.
"It will raise the risk premium and it will have a negative impact on the economy," Teo said.
Singapore Airlines Ltd, which reported its first-ever quarterly loss because of SARS, fell 6.9 percent to S$10.80.
Cathay Pacific Airways Ltd, Hong Kong's largest carrier, slid 5.2 percent to HK$12.80. China Southern Airlines Co, the country's biggest carrier, dropped 3.7 percent to HK$2.60.
Star Cruises Ltd, the world's fourth-largest cruise line operator, slid 12 percent to HK$2.30.
Still, the World Health Organization said it's not categorizing the Singapore patient as a confirmed case yet. The 27-year-old patient has symptoms such as fever and a dry cough, though his lung X-rays didn't show signs of pneumonia, which most SARS patients develop.
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