The CSI 300 Index dropped as much as 9.1% as onshore financial markets opened for the first time since Jan. 23. More than 2,600 stocks fell by the daily 10% limit. China’s benchmark iron ore contract declined 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 tumbled 1% to weaken past 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.
”It is really hard to trade stocks,” said Li Shuwei, chairman at Beijing WanDeFu Investment Management Co. “It’s impossible to predict how this disease will develop. Even the experts have no clear idea when the outbreak will end, let alone stock traders. It’s too early to buy stocks right now and it’s also difficult to sell as all shares are limit down. So I will just have to wait and see.”
The CSI 300 pared some losses to trade 7.6% lower at 10:28 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, slipped 0.1%.
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