Stocks plunge as China market reopens after holiday

Chinese investors monitor stock prices at a brokerage house in Beijing, January 10, 2020. /AP Photo

China stocks plunged more than 8 percent at market open as trade resumed on Monday following the Lunar New Year break and a steep global selldown on fears of the novel coronavirus outbreak.

The plunge wiped almost 370 billion U.S. dollars in market capitalization from the benchmark Shanghai Composite index, which opened nearly 9 percent lower. By mid-morning, the composite was 8 percent lower at 2,734.1, its lowest level since August, while the Shenzhen Composite Index, which tracks stocks on China's second exchange, was down 8.3 percent to 1,611.04.

Hong Kong went into the break 0.09 percent up at 26,336.41 on bargain-buying after being battered last week.

China's central bank sent a powerful message about its intent to support the economy, with a larger than expected injection of

1.2 trillion yuan

(173.8 billion U.S. dollars) of liquidity into markets and a deep 10-basis-point cut to its regular reverse repos.

Travel and tourism shares plummeted after domestic and international travel curbs were imposed to slow the virus.

China Southern Airlines and China Eastern Airlines were suspended after diving 10 percent.

Many healthcare stocks gained, as Chinese rush to stock up on face masks and other medical supplies. Shares in Shanghai No. 1 Pharmacy and China Meheco both were suspended after surging 10 percent.

Chinese markets have been closed since the end of trade on January 23. World stocks, led by falls in Asia, have dropped 3 percent since then.

A total of 17,205 cases of novel coronavirus were confirmed on the Chinese mainland as of Sunday, with 361 dead.

(With input from AFP, Reuters)