China stock market plunged 8%, worst day in 4 years


Chinese stocks recorded their worst day in years as expected when investors have lost confidence amid the worsening coronavirus outbreak and international reactions.

The Shanghai Composite plummeted 7.7% and the Shenzhen Component Index fell nearly 8.5% on their first day of trading after an extended Lunar New Year holiday. They had been closed since January 24.

The losses wiped out a combined $445 billion in market value.

The fall came despite efforts by China’s central bank to ease the impact of the virus on the world’s second largest economy with a $174 billion package announced on Sunday to provide liquidity in the banking system, and currency market .

Dow Jones futures rose Monday morning, along with S&P 500 futures and Nasdaq futures, even after Chinese markets tumbled and China coronavirus cases and deaths continue to swell.

More than 25,000 flights to, from and within China will be canceled this week as more than two dozen airlines suspend services to the country because of the coronavirus outbreak, leading to an unprecedented shakeup in the world’s second-largest aviation market, Bloomberg reported.

The Chinese government has accused the US of overreaction, causing “panic” and “spreading fear”, in its response to the deadly coronavirus outbreak.

It follows the US decision to declare a public health emergency and deny entry to foreign nationals who had visited China in the past two weeks.

There are more than 17,000 confirmed cases of the virus in China. Some 361 people have died there.

Outside China, there are more than 150 confirmed cases of the virus – and one death, in the Philippines.

After over six months of protests that wrecked Hong Kong’s economy, now the coronavirus outbreak threatens to derail things once again.

Hong Kong stocks began trading last Wednesday after the Lunar New Year holiday, and fell 5.9 per cent for the week to 26,312.63, with some stocks in hard-hit sectors such as air travel, retail, casinos and property tumbling by as much as 25 per cent.

Yesterday, the Hang Seng Index rebounded 0.2 per cent to 26,356.98.

Among Hong Kong stocks seeing big turnover, Chinese social media and gaming giant Tencent Holdings gained 1.9 per cent to HK$380, while Alibaba Group Holding jumped 2.3 per cent to HK$205.

The trend of the market should be down.

Hong Kong chief executive Carrie Lam on Monday announced new border closures over the Wuhan virus, amid intense public pressure to stop anyone crossing into the city from mainland China. Lam said further measures were being taken “to ensure the control of the boundary control points to reduce people movement across the border,” but fell short of a complete sealing off of the city.

By Winnie Troppie


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