China stocks slide to six-week trough as virus fears persist

  • Markets
  • Tuesday, 17 Mar 2020

HONG KONG: China stocks fell to six-week lows on Tuesday, in line with global markets as investor sentiment remained fragile after coordinated efforts by central banks failed to ease worries over the coronavirus impact.

The Shanghai Composite index closed 0.3% lower at 2,779.64, falling for the fifth trading day and hitting its lowest level since Feb. 4, when investors wiped $700 billions off the Chinese stock market on fears of an epidemic.

The blue-chip CSI300 index lost 0.5%, paring some losses after touching its lowest level since August 2019 earlier in the session. It also fell for the fifth day.

CSI300's financial sector sub-index fell 0.2%, while both the consumer staples sector and the real estate index lost 1.3%.

The smaller Shenzhen index fell 0.4% and the start-up board ChiNext Composite index edged up 0.4%.

China, where local transmission of the disease has slowed, reported another rise in confirmed virus cases as infections from abroad continued to push up the overall infection count.

The People's Bank of China will continue to fend off large inflows and outflows of short-term speculative capital, Vice Governor Chen Yulu has said.

"There's not a lot of news coming out of the mainland. U.S. stocks have been volatile. Although we are not as affected by the epidemic right now, the market's atmosphere is still one of caution," said Steven Leung, executive director for institutional sales at brokerage UOB Kay Hian.

"We recommend investors wait patiently for signals of stability in nearby markets, and pay close attention to changes in policy, capital (liquidity) and external markets," Zhang Gang, analyst at Central China Securities, wrote in a note.

Monday's dismal factory production data underscored the impact of the pandemic on the country.

Still, A-shares have remained relatively calm compared with global markets. On Wall Street, trading halted again overnight as shares tumbled on virus fears.

Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.2%, while Japan's Nikkei index closed up 0.1%.

At 0719 GMT, the onshore yuan was 0.11% weaker at 7.0029 per U.S. dollar.

So far this year, the Shanghai stock index is down 8.9% and the CSI300 has fallen 9.4%. Shanghai stocks have declined 3.5% this month.

About 30.61 billion shares were traded on the Shanghai exchange. The volume in the previous trading session was 35.19 billion. - Reuters

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