Coronavirus: Chinese stock exchanges resist; Europe, Japan and Wall Street in difficulty
Shanghai, Shenzhen and Hong Kong make few gains and losses as fears grow of virus spread. Tokyo's thud after yesterday's collapse in Europe and the US. Beijing has room to introduce new liquidity, unlike many other countries. Global recovery expected after initial volatility.
Beijing (AsiaNews / Agencies) - After yesterday's collapse of the indices in Europe and the United States, Chinese and Asian exchanges were relatively stable. The only exception is Tokyo which made a loss of 3.34%.
In the mid-afternoon, Shanghai lost 0.60% and Shenzhen gained 0.51%. Hong Kong is on positive ground (+0.22). The substantial stability of the Chinese stock exchanges is due to the liquidity injections carried out by the Central Bank - over 1000 billion yuan since the beginning of February - and other expansionary measures decreed by the Beijing authorities, such as the reduction of interest rates on loans to companies and the extension of the duration of the mortgages.
On the contrary, the European stock exchanges, Wall Street and Tokyo paid for growing fears of the virus outside China, but above all the effects of the drop in Chinese production. The Asian giant is a key element in the global goods chain. Chinese companies assemble the parts of many end products which then end up in the European and US markets - Foxconn, for example, produces Apple iPhones in China.
Analysts expect the central banks of the US, Japan and the European Union to introduce liquidity into their financial systems shortly. But their room for maneuver is rather limited, considering that they already have very low interest rates (in Europe, even negative). In the past 12 years, since the outbreak of the 2008 financial crisis, they have also pursued expansionary monetary policies ("quantitative easing"), which further reduces their scope for action.
Financial operators believe that after an initial period of volatility, caused by uncertainty about the timing of overcoming the epidemic fever, the indices will return to gain. Meanwhile, investors are turning to safe-haven assets such as gold, whose value rose 2.98% yesterday.