Chinese share market witnesses a drop after the resurgence of coronavirus

Chinese share market witnesses a drop after the resurgence of coronavirus

Chinese share market witnesses a drop after the resurgence of coronavirus

Chinese shares witnessed a steep decline on Tuesday as investors feared the second wave of COVID-19 infections. A sharp drop in the factory prices of the country Also heightened the economic impact caused by the virus outbreak. The Shanghai Composite index fell by nearly 0.59% at 2,877.71 points. China’s blue-chip CSI300 index tumbled down by around 0.49%, erasing all earlier gains, with its financial sector sub-index down by 0.79%, the consumer staples sector up by 0.51%, the real estate index lower by 1.25% and the healthcare sub-index high by 0.68%.

On Monday, Wuhan, the epicenter of the virus outbreak, reported its first cluster of COVID-19 infections after a month of lifting the lockdown in the city, spreading concerns about a second and wider resurgence. Wuhan is planning to conduct a city-wide nucleic acid testing over a period of 10 days. China’s factory prices in April Also went down at the sharpest rate in four years, suggesting the weakening industrial demand in the world’s second-largest economy as the pandemic has stunted global growth.

The Shenzhen index fell by around 0.65%, and the start-up board ChiNext Composite index was weaker by almost 0.16%. Chinese H-shares listed in Hong Kong fell by 1.68%, while the Hang Seng Index went down by 1.78%. Shanghai’s index tracking the B-shares, the shares that are traded in dollars in Shanghai and HK dollars in Shenzhen, dove by 6.9% by the mid-day break. The fall in B-shares is most likely a result of the thin liquidity in the market, as there have been no remarkable changes in the concerned companies. The chances of investors selling B-shares owing to the concerns over the local currency are considerably low as China’s steady monetary policy would likely support the Yuan.