China Stocks fall as virus worries dominate

Mainland China equity market finished lower for the sixth trading day on Wednesday, 18 March 2020, tracking losses in wider Asian markets, as the rapidly spreading coronavirus outbreak globally continued to weigh on investor sentiment. Adding to wariness were U.S. stock futures which slid 3.7 per cent in Asia, falling to their daily limit outside U.S. trade. At closing bell, the benchmark Shanghai Composite Index dropped 1.83%, or 50.88 points, to 2,728.76. The Shenzhen Composite Index, which tracks stocks on China's second exchange, declined 1.55%, or 26.49 points, to 1,678.25. The blue-chip CSI300 index shed 2%, or 73.42 points, to 3,636.26.

Mainland China shares remained firm most of the day following Beijing signalled support for its financial markets to weather the economic hit from the virus pandemic. But, active selling was triggered late afternoon on tracking fall in U.S. stock futures.The high volatility in overseas markets due to a continued virus contagion outside China and an oil price war has had a negative impact on China's capital markets.

 

Covid-19 has become a global pandemic and China is seeing more imported infections. Globally, more than 184,000 have been infected by the coronavirus while at least 7,529 lives have been taken, according to the latest figures from the World Health Organization.

CURRENCY NEWS: China's yuan was down against the dollar on Wednesday, as China central bank fixed softer mid-point rate. Prior to market opening on Tuesday, the PBOC set the midpoint rate of the yuan's daily trading band CNY=PBOC at 7.0328 per dollar. It was the weakest such fixing for the currency since Dec. 11, 2019. On the spot market, the yuan CNY=CFXS opened at 7.0250 per dollar, but clawed back to 7.0089 by midday, 29 pips weaker than Tuesday's late-session close. Its offshore counterpart CNH=D3 was marginally stronger, changing hands at 7.02 per dollar from Tuesday's close of 7.0297.

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