Chinese markets drop beyond 7% amid virus fears on first trading day after Lunar New Year holiday

Stocks in mainland China plummeted more than 7% on Monday as they returned to trade following an extended holiday amid an ongoing coronavirus outbreak. The Shanghai composite fell 7.72% to close at about 2,746.61 while the Shenzhen component dropped 8.45% to end its trading day about 9,779.67. The Shenzhen composite also declined 8.414% to close at around 1,609.00. The indexes all fell around 9% in early trade during the session.

The moves on the mainland came following an extended holiday amid an ongoing virus outbreak that has taken more than 300 lives in the country so far. The People’s Bank of China announced Sunday that it will inject 1.2 trillion yuan (approx. $173 billion) worth of liquidity into the markets via open market reverse repo operations. The Chinese central bank said the overall liquidity in the system would be 900 billion yuan (approx. $130 billion) more as compared to the same period last year.

Hong Kong’s Hang Seng index rose 0.35%, as of its final hour of trading, with shares of Chinese tech juggernauts Tencent and Alibaba jumping 2.04% and 2.5%, respectively. In Japan, the Nikkei 225 fell 1.01% to close at 22,971.94 while the Topix index also declined 0.7% to end its trading day at 1,672.66. South Korea’s Kospi closed largely unchanged at 2,118.88.