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China: Stocks set for worst week in 9 months amid virus fears
[HONG KONG] China stocks fell on Friday, heading for their worst week since May, as a sharply rising death toll from a virus outbreak kept investors on tenterhooks despite policymakers' efforts to calm nerves.
At the midday break, the Shanghai Composite index was 0.6 per cent lower at 2,849.51, down 4.3 per cent for the week.
The blue-chip CSI300 index fell 0.9 per cent, down 3.4 per cent for the week in its third straight weekly drop.
CSI300's financial sector sub-index was lower by 1.1 per cent, the consumer staples sector edged up 0.4 per cent, the real estate index fell 1.4 per cent and healthcare shares lost 1.5 per cent.
Chinese H-shares listed in Hong Kong were down almost 1 per cent. The Hang Seng Index fell 0.8 per cent to 27,279.31.
The smaller Shenzhen index fell 0.6 per cent and the start-up board ChiNext Composite index was weaker by 0.8 per cent.
The World Health Organization (WHO) said on Thursday it was too early to say that the coronavirus outbreak in China was peaking.
The death toll reached 636 in mainland China and Beijing declared a "people's war" on the rapidly spreading pathogen.
China's economy could be disrupted in the first quarter due to the coronavirus outbreak, but it is expected to recover once the virus is brought under control, a vice-governor of the central bank said.
A banking sector regulatory official said he expects banks' non-performing loan ratios to rise somewhat amid the outbreak.
Beijing has spared no effort in its fight to contain the epidemic and the long-term trend of the country's economic development will not change, Chinese state media reported President Xi Jinping as saying to US President Donald Trump.
"As the virus spreads, industry sectors more directly exposed to the disruption caused by the virus will likely suffer the largest price swing," T Rowe Price said in a note, naming Macau's gaming sector and the Chinese real estate as two of these sectors. "We will continue to look closely at which names are best suited to withstand these pressures and how Chinese authorities respond with any potential sector-specific stimulus."
Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.8 per cent, while Japan's Nikkei index was down 0.2 per cent.
The yuan was 0.1 per cent weaker at 6.9792 per US dollar.
As of 0400 GMT, China's A-shares were trading at a premium of 23.16 per cent over the Hong Kong-listed H-shares.
The Shanghai stock index is below its 50-day moving average and below its 200-day moving average.