Sign of easing
China stocks head for biggest weekly gains as virus fears ease
Authorities may be getting on top of virus
As investors around the world pressed the sell button over the impact of coronavirus, China stocks were on track for their biggest weekly advance in a year.
Investors expected more policy support to shore up the world’s second-largest economy where there were reports that it has been brought under control.
China’s central province of Hubei, excluding the provincial capital Wuhan, reported zero new cases of coronavirus over 24 hours for the first time during the outbreak, as authorities continued to contain imported infections in other parts of the country.
Niu Chunbao, chairman & chief investment officer at Wanji Asset, a Shanghai-based private equity fund, told the Reuters news agency: “There are quite a few new funds issued around the Lunar New Year holiday which bought shares on the dip, helping underpin the market.
“The coronavirus outbreak in China has also been brought under control.”
The rest of the world continues to see cases mounting and there was a further sharp selloff in London and overnight on Wall Street and Asia amid uncertainty over the spread of the coronavirus and its economic fallout.
The S&P 500 in New York tumbled 3.39%, Japan’s Nikkei stock index sank 2.94% and Australian shares were down 2.44%. Despite the upbeat report from Hubei, shares in the China CSI300 fell 1.22%, while stocks in Hong Kong, another city hard hit by the virus, fell 2.12%.
The FTSE 100 index is to open 118 points, or 1.8%, lower at 6,586.70. The index closed down 110.16 points, or 0.6%, at 6,705.43 after three days of gains.
So far, the virus has spread from China to more than 80 countries, infecting more than 95,000 people and killing over 3,000. It has also put a dampener on hopes for global economic growth.
From the stock market highs of early February, world markets have suffered their biggest losses since the 2008 financial crash and triggered an unscheduled US interest rate cut this week.