Chinese markets plunge as rising virus death toll fuels fears for global growth

Investors look at a screen showing stock market movements at a securities company in Hangzhou in China's eastern Zhejiang province on February 3, 2020. (AFP)
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Updated 03 February 2020

Chinese markets plunge as rising virus death toll fuels fears for global growth

  • Chinese markets dive in first session since Jan. 23
  • Beijing facing mounting international isolation

BEIJING: The death toll from a coronavirus epidemic in China rose to 361 and Chinese stock and commodity markets fell heavily on Monday as investors retreated into safe-haven assets in the first trading session after an extended Lunar New Year break.
Chinese stock and commodity markets plunged at the open in their first session since Jan. 23, when the outbreak of the newly identified virus had claimed only 17 lives in Wuhan city in Hubei province.
Since then the flu-like virus has spread to more than two dozen other countries and regions, with the first death outside of China reported on Sunday, that of a 44-year-old Chinese man who died in the Philippines after traveling from Wuhan.
The total number of deaths in China rose to 361 as of Sunday, up 57 from the previous day, the National Health Commission said. The number of new confirmed infections in China rose by 2,829, bringing the total to 17,205.
The Shanghai Composite index shed 8% to hit one-year low on Monday, wiping almost $370 billion off the market value, according to Reuters calculations.
The yuan began trade onshore at its weakest level this year . Iron, oil and copper traded in Shanghai all dropped by their daily limits, catching up with global price falls as the spread of the virus has weighed on the world’s growth outlook.
Investors were bracing for volatility when onshore trade in Chinese stocks, bonds, yuan and commodities resumed, following a steep global selldown on fears about the impact of the virus on the world’s second-biggest economy.
Looking to head off a panic, China’s central bank said it would inject 1.2 trillion yuan ($173.8 billion) of liquidity into the markets via reverse repo operations on Monday.
Beijing also said it would help firms that produce vital goods resume work as soon as possible, state broadcaster CCTV reported.
But while stock markets reopened, most provinces have extended the Lunar New Year holiday to try and contain the virus, with workers in Hubei not scheduled to return to work until after Feb. 13.
Cities like Wuhan remain in virtual lockdown with travel severely restricted, and China is facing mounting international isolation as well due to restrictions on flights to and from the country.
At least another 171 cases have been reported in more than two dozen other countries and regions, including the United States, Japan, Thailand, Hong Kong and Britain.
The World Health Organization has declared the outbreak a public health emergency of international concern, but said global trade and travel restrictions are not needed.
More than 250 people from 30 countries arrived in France on Sunday after being flown out of Wuhan, the center of the outbreak, in the latest evacuation of foreign nationals from the locked-down city.
Australia evacuated 243 people, many children, from Wuhan on Monday and will quarantine them on a remote island in the Indian Ocean off its northwest coast.
Australia on Saturday followed the United States in barring entry to all foreign nationals traveling from mainland China.
The Group of Seven leading industrialized democracies are trying to find a common approach for dealing with the fast-spreading new coronavirus, German Health Minister Jens Spahn said on Sunday.
The virus is thought to have emerged late last year in a Wuhan market illegally trading wildlife. It can cause pneumonia and spreads between people in droplets from coughs and sneezes.
It has created alarm because it is spreading quickly and there are still important unknowns surrounding it, such as its death rate and whether it is able to spread before any symptoms show.
The number of deaths in China from the new virus has now passed the total Chinese toll from the 2002-03 outbreak of Severe Acute Respiratory Syndrome (SARS), another coronavirus which emerged from China and killed more than 800 people around the world.
Even so, Chinese data on the numbers of infections and deaths suggests the new coronavirus is less deadly than the SARS outbreak, although such numbers can evolve rapidly.


Saudi minister: OPEC+ will take responsible approach to virus

Updated 54 min 12 sec ago

Saudi minister: OPEC+ will take responsible approach to virus

  • Saudi Arabia supports the further oil production cut, but Russia is yet to announce its final position on the matter

RIYADH: Saudi Arabia’s energy minister said on Tuesday he was confident that OPEC and its partner oil-producing nations, the so-called OPEC+ group, would respond responsibly to the spread of the coronavirus.

He also said Saudi Arabia and Russia would continue to engage regarding oil policy.

“Everything serious requires being attended to,” the minister, Prince Abdul Aziz bin Salman, told reporters at an industry conference in Riyadh.

An OPEC+ committee this month recommended the group deepen its output cuts by an additional 600,000 barrels per day.

Saudi Arabia supports the further oil production cut, but Russia is yet to announce its final position on the matter.

The minister said he was still talking with Moscow and that he was confident of Riyadh’s partnership with the rest of the OPEC+ group.

“We did not run out of ideas, we have not closed our phones. There is always a good way of communicating through conference calls,” he said.

Regarding the coronavirus, which has impacted OPEC member Iran, he said OPEC+ members should not be complacent about the virus but added he was confident every OPEC+ member was a responsible and responsive producer.

The flu-like SARS-CoV-2 virus, which first broke out in China, has now spread to more than 20 countries.

“Of course there is an impact and we are assessing, but we’ll do whatever we can in our next meeting and we’ll address that issue,” UAE Energy Minister Suhail Al-Mazrouei said at the same industry conference.

Saudi Aramco CEO Amin Nasser on Monday said he expected a short-lived impact on oil demand.

“We think this is short term and I am confident that in the second half of the year there is going to be an improvement on the demand side, especially from China,” he said.

Oil climbed on Tuesday as investors sought bargains after crude benchmarks slumped almost 4 percent in the previous session, although concerns about the global spread of the virus capped gains.