The Hardest Drop in the Chinese Market

In an environment where the virus epidemic worsened, Chinese stocks made their hardest decline since the boom of the stock bubble in 2015 on the first trading day of the New Year holiday return.

The CSI 300 Index declined by 9.1 percent on the first trading day of the markets after January 23. More than 2,600 shares fell 10 percent, the daily decline limit. China's benchmark iron ore contract fell 8 percent, its maximum daily limit, while oil and palm oil fell as much as their daily limits. 10-year government bond, which is the most actively traded paper of China, has suffered its strongest loss since 2014. The yuan fell more than 1 percent against the dollar, surpassing 7. This strong sales wave took place in an environment where regulatory agencies announced targeted measures for companies, banks and individuals to suffer less, and at the same time commitment to stability. On Monday, China injected money into the financial system as part of efforts by the central bank to provide abundant liquidity following the sharp decline in the markets. The bank also reduced the interest applied to the funds by 10 basis points. Authorities, on the other hand, asked investors to objectively assess the effects of the coronavirus, which has killed more than 360 people and infect more than 17,000 people. Beijing WanDeFu Investment Management Co. "It is really hard to trade on stocks," said president Li Shuwei. "It is impossible to predict how this disease will develop. Even experts do not have a clear view of when the outbreak will end. Now it is too early to buy stocks and it is hard to sell as all shares are based on the lower limit. Therefore, we will wait and see. ”