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China Stock Markets Plummet because of Coronavirus Fear

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The stock markets in China fell sharply on Monday, following the extended holiday period around the Chinese New Year. The financial markets in Shanghai and Shenzhen were closed since January 23 and investors could only now respond to the outbreak of the new coronavirus in the country.

 

The stock market gauge in Shanghai plummeted 7.8 percent in the meantime, and the stock market in Shenzhen lost 7.9 percent. The price falls have been the largest since August 2015.

As a result of the price fall, some $ 420 billion in value has evaporated on the Chinese stock exchanges. The Chinese central bank (PBOC) pumped billions into the market to prevent financial problems from arising if investors sold their shares on Monday.

At the opening, the main index in Shanghai fell by more than 9 percent.

This weekend, the PBOC already announced measures to help companies in the areas affected by the coronavirus. Banks received more money for this from the central bank and were asked, for example, to lower the interest rates on loans to companies in the area. Many companies in the country are closed until 9 February to contain the virus outbreak.

The death toll from the outbreak of the coronavirus in China has since risen to 360 and the number of infections has been increased to nearly 16,600 people. On January 23, the last trading day for the Chinese New Year, the death toll was still at 17.

The other stock exchanges in the Asian region also showed losses predominantly. The Nikkei in Tokyo closed 1 percent lower at 22,971.94 points.

In Hong Kong, where stock market trading already resumed last week, the Hang Seng index gained 0.2 percent in the plus. The Kospi in Seoul fell 0.2 percent and the All Ordinaries in Sydney ended 1.3 percent in the min.

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