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China Stocks fall to 13-month low

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Mainland China equity market finished session lower on Monday, 23 March 2020, amid wider selloff as fears over the economic impact of the global coronavirus outbreak continue to weigh heavily on investor sentiment. However, losses on the mainland were relatively limited as Beijing signalled further support for its markets and as new cases dropped in the country. At closing bell, the benchmark Shanghai Composite Index tumbled 3.11%, or 85.45 points, to 2,660.17, the weakest since Feb. 11, 2019. The Shenzhen Composite Index, which tracks stocks on China's second exchange, retreated 4.26%, or 72.58 points, to 1,31.88. The blue-chip CSI300 index declined 3.36%, or 122.92 points, to 3,530.31.

Investor confidence continued to waver, even amid efforts from governments and central banks to prop up major economies, shield jobs, and provide liquidity to markets amid the coronavirus pandemic.

Uncertainty linked to the worldwide lockdowns and travel curbs to counter the coronavirus pandemic stoked fears of a global recession and how damaging this could be for the global economy continues to keep markets on edge.

The global coronavirus outbreak continues to spread rapidly across the world, with the number of infected now over 294,000 and more than 12,900 lives taken, according to data from the World Health Organization.

Mainland China saw a drop in its daily tally of new coronavirus cases, official data showed on Monday, reversing four straight days of gains, as the capital Beijing ramped up measures to contain the number of infections arriving from abroad.

All 38 new cases on Sunday involved travellers arriving from abroad, many of them Chinese students returning home. A decrease in new virus cases as the capital Beijing ramped up measures to contain the number of infections arriving from abroad added to optimism the outbreak has been brought under control in the country.

A Chinese central bank official said on Sunday Beijing's recent policy measures were gaining traction while it had capacity for further action. The PBOC has already rolled out a raft of measures, including cutting lending rates and banks' reserve ratios, and doling out cheap loans for selected firms, to cushion the blow to the economy from the coronavirus outbreak.

Also providing some relief, the Trump administration on Friday said it was soliciting public comments on lifting additional tariffs on Chinese imports that could help the United States battle the coronavirus pandemic.

CURRENCY NEWS: China's yuan declined against the dollar on Monday, in spite of China central bank fixed stronger mid-point rate, due to the economic impact of the coronavirus pandemic. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 7.094 per dollar, 112 pips or 0.16% firmer than the previous fix of 7.1052. The onshore spot yuan CNY=CFXS opened at 7.0982 per dollar and was changing hands at 7.0989 at midday, 19 pips weaker than the previous late session close. The yuan fell 1.24% against the dollar last week, the biggest weekly loss since August 2019, as rising worries over economic fallout from coronavirus sparked an investor flight into cash.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, March 23 2020. 14:41 IST
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