Stocks in mainland China plummeted about 9% on Monday morning as they returned to trade following an extended holiday amid an ongoing coronavirus outbreak.
The Shenzhen component plunged 9.03% in the opening minutes while the Shenzhen composite fell 8.882%. The Shanghai composite dropped 8.6%, according to Reuters.
In Japan, the Nikkei 225 dropped 1.59%. The Topix index also declined 1.25%. South Korea’s Kospi also shed 1.46%.
Meanwhile, shares in Australia tumbled as well, with the S&P/ASX 200 dropping 1.69%. Overall, the MSCI Asia ex-Japan index traded 1.39% lower.
Investors will be bracing for the return of trade for mainland Chinese stocks at 9:30 a.m. HK/SIN on Monday, following an extended holiday amid an ongoing virus outbreak that has taken more than 300 lives in the country so far.
The People’s Bank of China announced Sunday that it will inject 1.2 trillion yuan (approx. $173 billion) worth of liquidity into the markets via open market reverse repo operations. The Chinese central bank said the overall liquidity in the system would be 900 billion yuan (approx. $130 billion) more as compared to the same period last year.
“While this will be the largest single-day addition since 2004, it implies a mere net injection of RMB150bn as commercial banks are scheduled to repay RMB1.05tn of funds on Monday,” strategists at Singapore’s DBS Group Research wrote in a note. “The authority may need to inject more cash in the rest of the week via reverse repo and/or medium-term lending facility to soothe market nerves.”
Submitted February 02, 2020 at 08:34PM by n0tfakenews https://ift.tt/37R6aKt
