Chinese markets plunge as investors finally get a chance to react to the coronavirus outbreak

Chinese stocks plunged Monday on the first day investors could react to the coronavirus outbreak in more than a week.

The Shanghai Composite opened 9% lower. The Shenzhen Component Index also plummeted 9% at open. Both are still down more than 7%.

Stock exchanges in Shanghai and Shenzhen had been closed since January 24 for the Lunar New Year. Markets elsewhere fell sharply last week as fears about the virus escalated. More than 14,300 people have been infected, the vast majority of them in mainland China.

China said before markets opened that it would pump billions of dollars into its markets to keep them stable. The People's Bank of China said Sunday that it would inject $1.2 trillion yuan ($173 billion) into the Chinese markets using the purchase of short-term bonds to shore up banks' ability to lend money. The measure will help maintain "reasonably ample liquidity" in the banking system and keep currency markets stable.

The net amount of liquidity being injected into the markets will be much lower. According to Reuters calculations using central bank data, more than $1 trillion yuan worth of other short-term bond agreements will mature Monday. That brings the net amount of cash flooding into the markets down to 150 billion yuan ($22 billion).

The central bank will also keep in contact with financial institutions and markets to determine what other policy responses may be necessary, according to Pan Gongsheng, deputy governor of the central bank.

China's financial regulators announced dozens of other measures to maintain financial stability and help the economy. Regulators also said they would offer more financial services to individuals and companies, among other moves.

Markets elsewhere in Asia opened lower Monday, too. Japan's Nikkei 225 (N225) fell 1.5% in early trading. Twenty cases have been confirmed in the country.

South Korea's Kospi (KOSPI) fell 1.6%. There are 15 confirmed cases in that country.

News Courtesy: www.newagebd.net