On Monday, the 3rd of February 2020, traders in Mainland Shanghai lost more than $393 billion from the China’s benchmark stock index amid a growing outcry over a strident spreading of Wuhan coronavirus, while death toll had raised to more than 350 at the first trading day in China following a prolonged Lunar New Year holiday aimed at containing the epidemic.
As beforementioned, it had been an atrocious opening of the day in Shanghai, while in the pre-market trading, China’s benchmark SSE Composite nosedived as much as 10 per cent. Concomitantly, amid a “flight-to-safety” response, investors were found ditching out the commodities alongside offshore Yuan over frets that the gruesome outbreak of coronavirus in China could send demand outlooks tattering in the toils.
However, following a havoc-scale sell-off despite a government stimulus package of $174 billion announced over the weekend, the Shanghai Composite index had wrapped up the day down by 8 per cent, remarking the index’s largest intra-day plunge in more than four years.
Apart from that, the Chinese Yuan breached its critical psychological level of 7 per dollar, while a swathe of Shanghai commodity exchange-traded assets ranging from copper to palm oil had hit their multi-month lows. Meanwhile, raising an alarming bell over further downfalls ahead in Shanghai stock exchange, a Rabobank Strategist, Michel Every said in a client note on Monday (February 3rd) afternoon, “You wanted to know what a real decoupling from China might look like, or what a ‘What if everyone just stayed at home and didn’t buy anything?’ economic thought-experiment looks like? Well here you are, folks. ”