Chinese stocks sink 9% as markets reopen to crisis after break

Monday, 03 Feb 2020


HONG KONG: Chinese stocks plummeted by the most since an equity bubble burst in 2015 as they resumed trading to the worsening virus outbreak.
The CSI 300 Index dropped as much as 9.1% as onshore financial markets opened for the first time since Jan. 23. China’s benchmark iron ore contract fell by its daily limit of 8%, while copper, crude and palm oil also sank by the maximum allowed. The yield on China’s most actively traded 10-year government bonds dropped the most since 2014. The yuan weakened 0.8% to the cusp of 7 per dollar.
The rout comes as regulators unleashed targeted measures to help blunt the pain for companies, banks and individuals, as well as pledging financial stability. China injected cash into the financial system Monday, with the central bank seeking to ensure ample liquidity as markets plunge. It cut the rates on the funds by 10 basis points. Officials also urged investors to evaluate objectively the impact of the coronavirus, which has killed more than 360 and spread to more than 17,000 people.
Read more about China’s latest support measures The CSI 300 pared some losses to trade 7% lower at 9:57 a.m. in Shanghai. Declines were led by telecom, technology and commodity producers. Hong Kong’s Hang Seng Index, which dropped 5.9% in three days of trading last week, rose 0.6%.
The People’s Bank of China added 900 billion yuan ($129 billion) of funds with seven-day reverse repurchase agreements at 2.4%. It will also inject 300 billion yuan with 14-day contracts at 2.55%. While the total is the largest single-day addition of its kind in data going back to 2004, it implies a net injection of just 150 billion yuan as more than 1 trillion yuan of short-term funds mature.
The outlook for China’s onshore markets was already bleak when investors went on holiday last month. The Shanghai Composite Index sank 2.8% on Jan. 23, its worst end to a Lunar Year on record.
The outbreak is leaving China increasingly isolated. The U.S., India, Australia, Indonesia, Singapore, Israel, Russia, New Zealand and the Philippines have all imposed restrictions on visitors from China. In Hong Kong, the government said it was studying further controls on travel from the mainland in response to a planned strike by medical workers aimed at pressuring the government to shut the border with China. - Bloomberg



Comments

Post a Comment

Popular posts from this blog

Gold Bars Fight Covid Kits for Space on the Plane

Image
Before the health crisis, gold typically traveled around the world on commercial flights. Swiss refiner Valcambi SA tried for five straight days last month to move a shipment of gold out of Hong Kong. Twice the metal was packed carefully onto a plane, only to be offloaded again. After daily attempts and numerous arguments, the gold suddenly arrived in Switzerland without warning, said Chief Executive Officer Michael Mesaric. “We had not even asked for a slot.” The coronavirus crisis has shone a light on a corner of precious metals markets that usually draws little attention: the logistics of transporting gold, silver and other metals across the world. The business is dominated by companies including Brink’s Co., G4S Plc, Loomis AB and Malca-Amit, which link miners and refiners with gold trading and consumption hubs around the world. In normal times, gold bars worth millions of dollars travel the world in the cargo holds of commercial planes, just a few meters from
Read more

US on track to unseat Saudi Arabia as #2 oil producer in the world

Image
© Jim Urquhart / Reuters New forecasts from the International Energy Agency say the United States is on track to overtake Saudi Arabia as the second-largest oil producer in the world, just behind Russia, according to the organization’s report on Friday. "This year promises to be a record-setting one for the US,"  the IEA wrote in its monthly market report.  "Relentless growth should see the US hit historic highs above 10 million barrels per day, overtaking Saudi Arabia and rivaling Russia during the course of 2018 – provided OPEC/non-OPEC restraints remain in place.” OPEC players have been wary of the strength of the American shale market as the nation’s products reach new countries every month. "US growth in 2017 beat all expectations ... as the shale industry bounced back, profiting from cost cuts, (and) stepped up drilling activity,"  the IEA added.  "Explosive growth in the US and substantial gains in Canada and Brazil will far outweigh pot
Read more

Can Anything Stop The Shale Surge?

Image
By  Tom Kool  - Jan 19, 2018, 2:00 PM CST Higher oil prices may lead to huge growth in U.S. shale production, according to revised predictions from both OPEC and the IEA. Friday, January 19, 2018 Oil prices fell back a bit at the end of this week. EIA data shows a rise in U.S. production, but also another strong decline in inventories. Brent is struggling to hold above $70, and benchmark prices await some direction. IEA: Explosive growth in U.S. shale will test oil prices.  The IEA’s latest Oil Market Report paints a mixed picture for prices. Clearly, the market is tightening, the IEA says, but it also says that shale growth will be “explosive” this year. The agency revised up its forecasts growth for U.S production from 870,000 bpd to 1.1 mb/d in 2018. That, combined with gains from other non-OPEC countries, could end the price rally, although the IEA says a lot of uncertainty remains.  Venezuelan oil production plunges by over 200,000 bpd . Venezuela’s Decemb
Read more