Chinese Equities Plunge 8% as Markets Reopen to Worsening Virus Outbreak

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By Alex Ho – Chinese equities slumped almost 8% on Monday morning as markets reopened to the worsening coronavirus outbreak after an extended Lunar New Year holiday.

The and the plunged 7.9% and 7.4% respectively by 9:45 PM ET (01:45 GMT). The two indices slid as much as 9% earlier in the day as traders dumped risky assets in response to rising fears about the spread of a new virus across China.

The death toll from the new coronavirus rose to 361 in China on Monday, while confirmed cases increased to 17,205.

The People’s Bank of China cut the rates on the funds by 10 basis points on Monday and said it will inject 1.2 trillion yuan ($174 billion) into the financial system as the central bank seek to ensure ample liquidity.

On the data front, the eased to 51.1 from 51.5 in December, missing expectations but remaining above the 50-mark that separates growth from contraction for the sixth straight month.

Hong Kong’s Index dropped 0.3%.

Meanwhile, Japan’s lost 1.2%. South Korea’s traded 0.3% lower.

Down under, Australia’s declined 1.2%. The Australian Bureau of Statistics reported on Monday showed approvals to build new homes held steady in December, a surprisingly firm result after a steep jump the month before.

Meanwhile, data from property consultant CoreLogic also showed home prices across the nation rose 0.9% in January, from December when they were up 1.1%.

The Reserve Bank of Australia is due to announce its latest policy decision on Tuesday.

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