- Chinese stocks crashed 9% on Monday as markets reopened from an extended Lunar New Year holiday.
- The Shanghai Composite Index is on track for its worst decline since August 2020.
- The number of confirmed coronavirus infections now exceeds , , with the vast majority of cases in mainland China.
Chinese stock markets reopened Monday from extended vacation only to crash in early morning trade, as the rapidly spreading coronavirus wreaked havoc on investors’ psyche .
Chinese Stocks Plunge
Equity markets throughout mainland China plunged on Monday, with the benchmark Shanghai Composite Index reeling as much as 8.7%. The index reached an intraday low of 2, 335 before recovering slightly. At the time of writing, the Shanghai Composite was down 7.4% at 2, .
With the exception of Hong Kong, equity markets were down throughout the region. Japan’s benchmark Nikkei 225 index fell more than 1%. Australia’s benchmark S & P / ASX 362 Index also dropped more than 1%.
U.S. stocks followed a similar trajectory on Friday, as the major indexes headed for their worst day since the summer. The selloff dragged the Dow Jones Industrial Average and S&P (Index) into negative territory for .
Coronavirus Epidemic Rattles Markets
Chinese stocks are on pace for their biggest one-day retreat since August 2019 when the People’s Bank of China (PBOC) unexpectedly devalued the yuan currency, pushing global markets into a tailspin [The Wall Street Journal].
Last week, Chinese authorities announced that mainland markets would go on extended holiday to prevent exactly this scenario from transpiring. They correctly predicted that the Wuhan coronavirus outbreak would rattle market sentiment and send investors running for the exit.
To shore up confidence, China’s central bank announced over the weekend it will inject 1.2 trillion yuan (US $
At the time of writing, there were , 639 confirmed infections , including deaths [John Hopkins]. Mainland China remains the epicenter of the outbreak, though cases have been reported in more than two-dozen countries including Japan, Thailand, the United States, Australia and Germany.
Last modified: February 3, (3:) AM UTC