(Bloomberg) -- Chinese shares slid and the yuan weakened Monday as traders returned from an extended holiday amid the worsening coronavirus outbreak. Support measures from China’s government helped stem losses somewhat in Asia, while U.S. futures rose and Treasuries slipped.
Stocks in Shanghai opened 9% lower, while local iron ore and copper futures fell by the daily limit. Equities came off their lows in Tokyo, Seoul and Sydney and fluctuated in Hong Kong. Oil and gold saw modest declines, while the yuan fell past the key 7-per-dollar level. The deadly outbreak showed no signs of slowing with China’s death toll reaching at least 360.
Monday’s moves come on the back of turmoil last week that sent global equities to the worst week since August, amid concern growth will falter as the virus spreads. The People’s Bank of China pledged 150 billion yuan ($21.7 billion) in liquidity in a slew of measures to shore up their financial markets.
“It’s way too early to dismiss this outbreak as just a brief interruption of constructive markets,” said Erik Nielsen, group chief economist at UniCredit Bank AG in London. “If the outbreak does not dissipate soon, the authorities in both China and elsewhere are likely to extend travel bans, people will stay at home, and the increase in uncertainty will cause consumers to delay consumption and firms to defer investment.”
Elsewhere, the pound dipped as investors reacted to a report that U.K. Prime Minister Boris Johnson could walk away from talks over Britain’s future trade relationship with the European Union.
Here are some key events coming up:
- The first contest to choose a Democratic nominee to run against Donald Trump in November is the Iowa caucuses Monday.
- The U.S. manufacturing gauge from the Institute for Supply Management is due Monday. There are also a slew of other PMIs, including India and Brazil.
- Tuesday brings a policy decision from the Reserve Bank of Australia.
- Friday has the U.S. employment report for January.
Stocks
- The MSCI Asia Pacific Index fell 1% as of 12:05 p.m. in Tokyo.
- Japan’s Topix index lost 0.7%.
- Shanghai Composite Index fell 8.2%.
- Hong Kong’s Hang Seng fell 0.3%.
- South Korea’s Kospi index retreated 0.5%.
- Australia’s S&P/ASX 200 Index dropped 1.3%.
- Future on the S&P 500 added 0.5%. The index declined 1.8% on Friday.
- The yen fell 0.1% to 108.49 per dollar.
- The offshore yuan fell 0.2% to 7.0093 per dollar.
- The euro bought $1.1083, down 0.1%.
- The pound lost 0.3% to $1.3171.
- The yield on 10-year Treasuries ticked up one basis point to 1.52%.
- Australia’s 10-year yield dropped four basis points to 0.91%.
- West Texas Intermediate crude lost 0.6% to $51.25 a barrel.
- Gold fell 0.4% to $1,583 an ounce.