Mainland China equity market finished session lower on Thursday, 12 March 2020, joining global risk-off selloff, amid deepening concerns over economic impact of coronavirus after the United States imposing sweeping restrictions on travel from Europe and world health officials declared the coronavirus a pandemic. However, market losses were limited as compared to other Asian peers fall on hopes that Beijing will roll out additional monetary easing measures after the cabinet said China will make targeted cuts in bank reserve requirement ratios (RRR) to boost lending support for small companies that have been hit hard by the coronavirus outbreak. At closing bell, the benchmark Shanghai Composite Index dropped 1.52%, or 45.03 points, to 2,923.49. The Shenzhen Composite Index, which tracks stocks on China's second exchange, declined 2.2%, or 40.84 points, to 1,818.56. The blue-chip CSI300 index shed 1.92%, or 77.52 points, to 3,950.91.
The coronavirus outbreak, which originated in China, has cast a shadow over the global economic outlook.
The coronavirus has infected more than 124,000 people and claimed nearly 4,600 lives worldwide, with market experts fearing that pandemic could disrupt global supply chains and drive the global economy into recession.
The World Health Organization described the new coronavirus as a pandemic for the first time on Wednesday, adding that Italy and Iran were now on the frontline of the disease and other countries would soon join them. The risk-off mood accelerated its downswing after Trump announced a 30-day ban on all travel from Europe excluding Britain swelled concerns that business activities between the United States and Europe will be badly affected.
The spread of the coronavirus in mainland China was largely under control, with new cases in the epicentre Hubei province fell to single digits for the first time. Overall, there were 15 new cases in mainland China.
CURRENCY NEWS: China's yuan declined against the dollar on Thursday, as China central bank fixed softer mid-point rate. The People Bank of China set the midpoint rate CNY=PBOC at 6.9641 per dollar, 29 pips softer than the previous fix of 6.9612, the weakest since 2 March 2020. In the spot market, onshore yuan CNY=CFXS opened at 6.9800 per dollar and was changing hands at 6.9732 at midday, 129 pips weaker than the previous late session close.
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