Stock markets in China rebounded on Tuesday on assurance from policymakers that they will stabilise markets
China stocks rebounded on Tuesday after policymakers stressed they will stabilise markets that took a hammering amid the coronavirus outbreak, with nearly $400 billion of market value erased from Shanghai’s benchmark index in the previous session.
Stock markets in China have taken a beating over the past few days following the coronavirus outbreak, originating from Wuhan that has killed 420 people so far.
At the midday break, the Shanghai Composite index was up 0.2% at 2,752.44 points, jumping off a fresh one-year low hit at the open. The blue-chip CSI300 index was up 1.3%.
CSI300’s financial sector sub-index rose 0.6%, the consumer staples sector was up 1.6%, the real estate index gained 0.6% and the healthcare sub-index was up 2.2%.
The smaller Shenzhen index climbed 0.5% and the start-up board ChiNext Composite index rose 3.7%.
The onshore yuan was trading 0.3% firmer at 7 per dollar, as of 0431 GMT.
Investors shed almost $400 billion in market value from Shanghai’s benchmark index in the previous session – the first opportunity to reflect their anxiety over the epidemic after the extended Lunar New Year holiday.
After the drop on Monday, expectations for further policy easing are rising, which provide support for the A-share market, said Zhou Longgang, an analyst with Huachuang Securities.
China’s central bank said on Tuesday that its huge liquidity injections through open market operations this week showed its determination to stabilise financial market expectations and restore market confidence.
The People’s Bank of China (PBOC) injected 1.2 trillion yuan ($173.81 billion) into money markets through reverse bond repurchase agreements. It also unexpectedly cut the interest rate on those short-term funding facilities by 10 basis points.
The impact from a virus epidemic on China’s economy will be limited and temporary and the country’s financial markets will return to normal in the long run, a commentary in a newspaper owned by the central bank said on Monday afternoon.
The death toll in China rose on Tuesday by a new daily record to more than 420 and total infections in China rose by 3,235 to 20,438. There were at least 151 cases in 23 other countries and regions, including the United States, Japan, Thailand, Hong Kong and Britain.
China has agreed to allow U.S. health experts into the country as part of a World Health Organization (WHO) effort to help fight the fast-spreading coronavirus, as the number of cases and deaths continued to mount.
Hong Kong recorded its first death from coronavirus infection on Tuesday.
The city’s benchmark Hang Seng Index – which took much of the heat last week – was up 1.2%. Chinese H-shares listed in Hong Kong rose 1.4%.
Around the region, MSCI’s Asia ex-Japan stock index was firmer by 1.4%, while Japan’s Nikkei index gained 0.4%.
