Stocks in China slide on coronavirus fears

Stocks in mainland China plunged Monday as the number of people with coronavirus in the nation continues to grow. 

China’s Shanghai Composite tumbled nearly 9% after reopening following an extended holiday during the Lunar New Year. Other Asian markets slumped, with the Shenzhen Composite shedding 8%. Japan’s Nikkei 225 fell 1% and Australia’s S&P/ASX 200 lost 1.5%.

A further outbreak of the coronavirus rattled investors, sparking sharp swings across financial markets worldwide. China has reported at least 360 deaths while the number of cases around the world has grown to more than 17,000 according to data collected and mapped by Johns Hopkins University’s Center for Systems Science and Engineering.

Investors fear that a reduction of flights to China and the closing of businesses there could slow the world’s second-largest economy, which could hinder global growth.  A recent report by Coresight Research predicted the effects of the virus would cut China’s gross domestic product by up to $14.3 billion. 

On Sunday, China’s central bank announced plans to inject about $173 billion into its economy in an effort to help cushion any shocks to the markets when trading resumed. 

The coronavirus fallout comes as trading in China resumes following the extended Lunar New Year holiday, a major spending and travel period that largely ended Feb. 2, though some festivities will continue in parts of China through Feb. 8. The markets in China had been closed since Jan. 23. 

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The declines follow steep losses on Wall Street on Friday. Broad declines hit everything from airlines to resort operators to technology companies, with U.S. stocks posting their worst January since 2016. The Dow Jones Industrial Average plunged 603.41 points Friday, wiping out its gains for the year. Dow futures were up 178 points on Sunday evening. 

Many airlines have reduced flights to China or canceled them altogether. Other global companies including Apple, Disney, Facebook, Google, General Motors, Honda, McDonald's and Starbucks have temporarily closed shop in China or have restricted employee travel. 

Follow Dalvin Brown on Twitter: @Dalvin_Brown.