China will keep its stock markets closed until next Monday as it combats the coronavirus crisis which has already claimed more than 130 lives in the mainland.
The Shenzhen and Shanghai stock exchanges issued separate statements saying trading would resume only on February 3. Both bourses were originally scheduled to resume trading on January 31 after the Lunar New Year holiday.
The same extended suspension will also apply to stock connect programs that link mainland markets to the Hong Kong-based exchange.
China's coronavirus crisis continues to escalate with no visible sign of a slowdown. After only just a handful of reported cases in early January, the official count has surged to nearly 6,000. Entire cities have been quarantined and issued travel bans will affect around 60 million people in the country.
Panic Selling
Market onlookers believe that the exchanges’ extended breaks are intended to prevent panic selling due to the escalating outbreak. But there are doubts about whether this would moderate sentiments and if the timing would prevent a deep correction from worried investors. As a reference, a U.S.-listed ETF which tracks large cap Chinese companies listed in Hong Kong (FXI) has dropped nearly 6.4 percent in the last five trading days.
Despite serious national efforts, doubts remain about when the outbreak would be contained and there are concerns of further acceleration after Zhou Xianwang, the major of Wuhan, told a press conference recently that 5 million residents had left the city before the lockdown. And even locally in Wuhan – the original source of the virus – it remains to be seen when the crisis will turn the corner.
Despite limited reporting on the ground, one viral video reached global viewers and offered a glimpse into the desperation faced by the citizens within the now quarantined Wuhan. The video involves an alleged local resident who claimed that the local medical service was «completely paralyzed».
«I have a lot of friends who work at hospitals [who] say if you enter a hospital [with the virus], they will just give you some anti-inflammatory drugs or some hormone injection,» he said in the video, expressing outrage in other alleged cases where coronavirus victims are simply told to go home and isolate themselves due to lack of resources to treat them. «Or to put it bluntly, you are just left for dead.»
