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Chinese markets plummet amid coronavirus spread in first trading since New Year break

Chinese stocks plummeted by the most since an equity bubble burst in 2015 as they resumed trading to the worsening virus outbreak.

The CSI 300 Index dropped 9.1% as onshore financial markets opened for the first time since Jan. 23. China’s benchmark iron ore contract fell by its daily limit of 8%, while copper, crude and palm oil also sank by the maximum allowed. The People’s Bank of China set the yuan fixing at 6.9249 per dollar, stronger than the average estimate of traders surveyed by Bloomberg.

Regulators have in the past days unleashed targeted measures to help blunt the pain for companies, banks and individuals, as well as pledging financial stability. The central bank has said it will ensure adequate interbank liquidity conditions, supplying cash that will more than offset the 1.05 trillion yuan ($152 billion) in short-term funding that matures Monday. Officials also urged investors to evaluate objectively the impact of the coronavirus, which has killed more than 360 and spread to more than 17,000 people.

Hong Kong’s Hang Seng Index, which dropped 5.9% in three days of trading last week, slid 0.5%.

The outlook for China’s onshore markets was already bleak when investors went on holiday last month. The Shanghai Composite Index sank 2.8% on Jan. 23, its worst end to a Lunar Year on record. A drop of at least that magnitude at Monday’s close would be its worst debut following the break in at least 20 years.

The outbreak is leaving China increasingly isolated. The U.S., India, Australia, Indonesia, Singapore, Israel, Russia, New Zealand and the Philippines have all imposed restrictions on visitors from China. In Hong Kong, the government said it was studying further controls on travel from the mainland in response to a planned strike by medical workers aimed at pressuring the government to shut the border with China.

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