Market and product

Shares of major petrochemical firms in China plunged on Monday as long-term economic worries about the coronavirus outbreak continued to weigh on investor sentiment.

At 02:30 GMT, Sinopec Shanghai Petrochemical Co slumped 10.05% while China Petroleum & Chemical Corp was down 4.66% at the Shanghai bourse, which re-opened on 2 February after a prolonged holiday.

The Shanghai Stock Exchange Composite Index shed 7.19%, off its lowest level in early trade when it declined nearly 9%; while the Shenzhen Stock Exchange Composite was down 7.50%.

In Hong Kong, PetroChina Co was down 2.03%, while CNOOC Ltd slipped 0.34% as the benchmark Hang Seng Index was up by 0.61%.

Other Asian bourses tracked the weakness in China, with Japan’s benchmark Nikkei 225 Index down 0.98% and the Korea Stock Exchange KOSPI Index slipping by 0.02%.

The death toll from the novel coronavirus (2019-nCoV) continued to rise, with China’s National Health Commission reporting an additional 57 deaths and 2,829 new confirmed cases on 2 February. That brings the country’s total to 361 deaths and 17,205 confirmed cases.

The People's Bank of China (PBoC) on Monday unexpectedly cut the interest rates on reverse repurchase agreements by 10 basis points.

The central bank reduced its seven-day reverse repo rate to 2.40%, and cut the 14-day tenor to 2.55%.

This follows PBoC’s announcement on Sunday that it will inject yuan (CNY) 1,200bn ($171bn) worth of liquidity to calm the markets.

China had extended the week-long Lunar New Year holiday, which was originally supposed on end on 30 January, amid the Wuhan coronavirus outbreak.

Chinese media group Caixin released its January general manufacturing purchasing managers' index (PMI) for China on Monday, showing a lower reading of 51.1 from 51.5 in December.

China’s official January manufacturing PMI was at 50, down from 50.2 in December, as industrial production growth slowed due to the Lunar New Year holiday.

A PMI reading of 50 and above indicates expansion, while a number below denotes contraction.

The impact of the Wuhan coronavirus outbreak on industries was likely not reflected in the January PMI surveys, according to analysts.

As of Monday morning, at least 24 provinces in China have officially told businesses not to resume their operations before 10 February.

These include Anhui, Chongqing, Fujian, Guangdong, Guangxi, Guizhou, Hebei, Heilongjiang, Henan, Hunan, Inner Mongolia, Jiangsu, Jiangxi, Jilin, Liaoning, Ningxia, Shaanxi, Shandong, Shanghai, Shanxi, Suzhou, Xi’an, Yunnan and Zhejiang.

Businesses in Hubei province, where Wuhan is located, have been the hardest hit and will not re-open until 14 February. - ICIS-