Chinese stocks crash as virus gloom infects markets
Shanghai, Feb 3 (AFP/APP): Chinese stocks collapsed Monday with hundreds of firms plunging by the maximum 10 percent as investors got their first chance in more than a week to react to a barrage of bad news from the spiralling coronavirus outbreak.
The benchmark Shanghai Composite Index ended the morning session down 8.13 percent, or 241.87 points, at 2,734.66, while the Shenzhen Composite Index, which tracks stocks on China’s second exchange, was down 8.30 percent, or 145.78 points, to 1,611.04.
Hong Kong went into the break 0.09 percent, or 23.78 points, up at 26,336.41 on bargain-buying after being battered last week.
The scale of the plunge was remarkable even by the standards of China’s notoriously volatile share markets, indicating deep concern over the economic impact of the epidemic, which has now killed more than people SARS in 2003.
The last time Chinese indices had plunged in excess of eight percent in a day was when an equities bubble popped nearly five years ago.
“Investor panic quickly spread across the board and will be dominating the market over the short term,” said Yang Delong, chief economist at First Seafront Fund.
More than 2,600 stocks fell by the 10 percent daily limit, according to Bloomberg financial data.
The yuan also weakened more than 1.5 percent to around 7.02 per dollar.
Markets in the world’s second-biggest economy had closed on January 24 for the week-long Lunar New Year holiday, but in that time the viral epidemic that started in Wuhan has spread globally.
They were scheduled to reopen on Friday but the government extended the holiday to help deal with the virus.
Stock markets worldwide have sunk as major corporate names froze or scaled back their Chinese operations, threatening global supply chains that depend heavily on the country.
