The yuan opened at its weakest level in 2020 and slid almost 1.2%, past the symbolic 7-per-dollar level CNY=, as the falls soured the mood in markets throughout Asia.
Investors erased $420 billion from China’s benchmark stock index on Monday, sold the yuan and dumped commodities as fears about the spreading coronavirus and its economic impact drove selling on the first day of trade in China since the Lunar New Year.
The market slide came even as the central bank poured cash in to the financial system - a show of support for the economy -and despite apparent regulatory moves to curb selling.
The total number of deaths in China from the coronavirus rose to 361 as of Sunday. It had stood at 17 when Chinese markets last traded on Jan. 23.
By lunchtime, the benchmark Shanghai Composite index .SSEC sat 8% lower near an almost one-year trough and poised to post its worst day in more than four years.
The yuan opened at its weakest level in 2020 and slid almost 1.2%, past the symbolic 7-per-dollar level CNY=, as the falls soured the mood in markets throughout Asia.
Shanghai-traded oil, iron ore, copper and soft commodities contracts all posted sharp drops, catching up with sliding global prices.
The new virus has created alarm because it is spreading quickly, much about it is unknown, and authorities’ drastic response is likely to drag on economic growth.
“This will last for some time,” said Iris Pang, Greater China economist at ING.
“It’s uncertain whether factory workers, or how many of them, will return to their factories,” she said. “We haven’t yet seen corporate earnings since the (spread of the) coronavirus. Restaurants and retailers may have very little sales.”
More than 2,500 stocks fell by the daily limit of 10%. The Shanghai Composite last sat at 2,734.7 and the onshore yuan at 7.0165 per dollar.
Copper SCFcv1 sank to its lowest in more than three years, falling by its daily limit of 7%, while aluminum SAFcv1, zinc SZNcv1 and lead SPBcv1 shed more than 4% and soybeans DSAcv1 dropped 2%.
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