On Monday, mainland Chinese stocks experienced serious problems due to the coronavirus outbreak. It was the first day of trading after an extended Lunar New Year Holiday. Chinese indexes fell by more than 7%. It was the worst day for stock indexes in years.
Hopefully, on Tuesday, Chinese stocks started to recover after sustaining huge losses on February 3. The Shanghai composite was 1.34% higher at about 2,783.29.
At the same time, another Chinese stock index, the Shenzhen component also strengthened its position. Its index jumped 3.17% to 10,089.67. Moreover, the Shenzhen composite gained 1.804% to approximately 1,638.02.
In Hong Kong, the Hang Seng index rose 1.28% as of its final hour of trading. The shares of Chinese tech giants Tencent and Alibaba increased on Tuesday. Both of them are listed on the Hong Kong Stock Exchange. Shares of Tencent gained 3.26% while Alibaba’s shares added 4.2%.
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Japan has the second-largest economy in Asia after China and the third-largest in the world. On February 4, the Nikkei 225 closed 0.49% higher at 23,084.59. Meanwhile, the Topix index added 0.69% to end its trading day at 1,684.24.
South Korea’s Kospi added 1.84% to close at 2,157.90.
Shares in Australia also increased on Tuesday. The S&P/ASX 200 rose 0.37% to 6,948.70.
Stocks and Reserve Bank of Australia
On Tuesday, the Reserve Bank of Australia decided to leave the cash rate at 0.75%. The Governor of the central bank made a comment about this decision. Philip Lowe stated low-interest rates are essential to help the country to reach full employment and to achieve the inflation target.
Also, Lowe said coronavirus has a serious impact on the Chinese economy. It is important to mention that China is a strategic trading partner of Australia. As a result, problems in China will affect the Australian economy as well. This can create additional issues for the stocks.