Coronavirus fears wipe $393bn off China's stock market

Investors erased $393bn from China’s benchmark stock index on Monday, sold the yuan and dumped commodities as fears about the spreading coronavirus and its economic impact drove selling on the first day of trade in China since the Lunar New Year. A nearly 8% plunge on the Shanghai composite index was its biggest daily fall in more than four years, Reuters reported.

The Chinese yuan blew past the 7-per-dollar mark and Shanghai-traded commodities from palm oil to copper hit their maximum down limits. The wipeout came even as the central bank made its biggest cash injection to the financial system since 2004 and despite apparent regulatory moves to curb selling. On Sunday the Chinese central bank announced that it was putting 1.2 trillion yuan ($173bn) into the markets. "We are fully confident in and capable of minimizing the epidemic's impact on economy," said Lian Weiliang, deputy chief of the National Development and Reform Commission, at a news conference in Beijing.

The new virus has created alarm because it is spreading quickly, much about it is unknown, and authorities’ drastic response is likely to drag on economic growth. The total number of deaths in China from the coronavirus rose to 361 by Sunday, compared with 17 on Jan. 23, when Chinese markets last traded.

 

Similar articles