Stock Market: Chinese and Other Markets Recover

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Chinese Stock Market Recovers, Asian Shares Bounce

TOKYO, Japan – The Asian stock market was firmer on Tuesday as most Chinese stocks recouped losses from the previous trading session because of fears on spreading coronavirus in the country.

Asian stocks were trading more positively on Tuesday as the Chinese stock market reverse some of its plunges during the previous trading session, the first one after the Lunar New Year, amid the ongoing efforts of the government to calm the rising fear over the deadly virus. However, sentiment in the market has stayed fragile, with oil prices going down to its 13-month low.

The broadest index of Asia-Pacific stocks of MSCI excluding Japan rose today by around 1.5%. Gains in the market today was led by shares in South Korea and Australia. Moreover, the Nikkei 225 index in Japan also traded higher today, adding 0.6% from its previous market close.

Meanwhile, the stock market in China has remained trading choppy today following the $400 billion worth market value from the benchmark index of Shanghai was wiped out on Monday due to increasing anxiety of the spreading coronavirus in the country.

Following the 8% slide during the session yesterday, the Shanghai Composite traded 1.2% higher today, while the blue-chip CSI300 index added 2.5%. The Hang Seng index in Hong Kong also gained around 1.0%.

Despite the calm sentiment in the stock market on Tuesday, more concerning headlines on the spreading coronavirus came out. Hong Kong reported its first death due to coronavirus, marking the second fatality recorded outside China and adding to the death toll by the virus, which is now at 427.

According to Singapore’s National Australia Bank’s head of markets strategy, Christy Tan, Chinese officials have been supporting the financial market, which, according to her, is an assurance that the downtrend is not going to be allowed to go further. However, she said that the support from authorities might be temporary if worse headlines concerning the containment of the virus will start coming out.

On Tuesday, China-backed Securities Times has released an op-ed to call on market players to stay calm to prevent the plunge. The op-ed published followed the move of the securities regulator of the country to reduce short selling and block mutual fund managers from selling their stocks unless they are facing investor redemptions.

Furthermore, the central bank of China has trimmed some of the critical lending rates while putting massive cash into the economy.

Elsewhere, Euro stocks are expected to follow the gains of Asian shares, with major futures looking towards gains of about 0.4% to 0.5%. Wall Street has also ended Monday with 0.5% advance, taking comfort from the surprising solid figures from the US manufacturing sector.