Coronavirus outbreak created various problems for economies around the world. For example, the world’s second and third-largest economies are in Asia. In this situation, it is not surprising that the ongoing coronavirus outbreak had a huge impact on the stock markets.
On Monday, Asia Pacific markets traded mixed as investors are closely monitoring the situation to access the economic impact of this virus. Unfortunately, the number of infected surpassed 70,000.
Despite the problems, mainland Chinese stocks strengthened their positions. The Shanghai Composite added 2.28% to 2,983.62. At the same time, the Shenzhen composite gained 3.18% to 1,835.96. The Shenzhen component rose 2.98% to 11,241.50.
Hong Kong’s Hang Seng index gained 0.58% during the final hours of trading.
In Japan, stock indexes failed to deal with problems. The benchmark Nikkei 225 fell 0.69% to 23,523.24. Moreover, the Topix index declined 0.89% to 1,687.77. Based on the government’s data, the Japanese economy shrank at an annualized pace of 6.3% in the last quarter of 2019.
In Australia, the ASX 200 index closed fractionally lower at 7,125.10.
South Korea’s Kospi index dropped 0.06% to 2,242.17.
Stock Markets and Chinese officials
Chinese authorities are trying to minimize the damage to the economy. China is planning targeted tax cuts. Moreover, the government will increase spending to stabilize the situation.
Moreover, the Ministry of Finance decided to provide 8 billion yuan. The government will allocate the funds as part of the second round of support. This way Chinese officials would like to boost the economy.
As of Friday, the ministry allocated 90.15 billion in support based on the information provided by the central government.
Also, economists expect the People’s Bank of China to ease funding conditions in Chinese money markets. This move would allow countering the risks created by the ongoing coronavirus outbreak.
This virus coincided with Lunar New Year. As a result, millions of people had to modify their plans due to the outbreak. It will take time to access the economic impact on the local as well as the global economy.