The epidemic of new coronavirus pneumonia in Wuhan is not under control
The market is worried that the Chinese economy will be hit harder. The Hang Seng Index fell more than 800 points, fell 711 points or 2.6% throughout the day, and closed at 26,449 points. The market turnover was 1125.5 billion yuan. Since entering the Year of the Rat, Hong Kong stocks have fallen 1,500 points in two days. Based on the highs on the 20th of this month, 7 trading days have accumulated a decline of 2,725 points from the highs. In view of the continued expansion of the epidemic, Daxing generally estimates that the impact of this epidemic on China’s economy will be greater than that of SARS in 2003. It is believed that it will drag down global and Chinese stock market and GDP growth.
The pneumonia epidemic was not under control, and continued to hit the Asian stock market. The Hong Kong stock market referred to the settlement date yesterday, and it continued to fall. After falling 789 points the day before yesterday, it fell nearly 800 points in the afternoon yesterday, closing down 711 points to 26,449 points, a drop of 2.62%. The H-Share Index closed at 10,325 points, down 293 points or 2.77%. Market turnover was 125.5 billion yuan. February futures index closed at 26,350 points, down 708 points, 99 points below spot, with more than 180,000 contracts traded.
Domestic demand bets on some drug stocks
50 blue chips fell again across the board, with 1,600 shares falling on the main board and only 272 on the rise. The heavy hit shares also include mobile phone stocks AAC (2018) and Sunny (2382), both of which fell more than 7%. Gambling, domestic demand, aviation and rent collection continued to plummet. It is estimated that the epidemic will hit many industries. Individual medical and pharmaceutical stocks have continued to speculate. Among them, China Medical (8225) applied to the government to resume the production of ritonavir that is effective for the new coronavirus. The stock price has continued to skyrocket, and rose 3.9 times yesterday to 2.1 yuan, which means that it has been in two days. Soared 17.6 times, an alarming rise. In addition, other shares such as Great Health (2211) also surged 1.6 times in a single day.
Faxing: If the global stock market deteriorates, insert 10%
Societe Generale forecast that if the epidemic continues to heat up, it may reduce global stock markets by 10%. Alain Bokobza, a renaissance strategist, said that China accounts for 18% of the global economy. If the epidemic continues to expand, it will have a huge negative impact on the international economy. He estimated that if the global stock market fell by 10%, it would be equivalent to 5 trillion US dollars in global market value.
He also said that many market people often used the 2003 SARS epidemic to make speculations, but in the past 17 years, China’s rapid economic development and close integration with the global economy have hit the stock market far more than SARS. In addition, the global stock market during the SARS period In the final stage of the long-term bear market, the low valuations of global stock markets only prompted subsequent large-scale rebounds. And whether it will be the same this time, he thinks it is difficult to judge, after all, many global stock markets are at historical highs.
Nomura: Mainland loosens economy
Nomura also released a report that the worst case of the new pneumonia epidemic has not yet arrived, but the scale of the epidemic has been greater than the SARS outbreak in 2003. With the end of the Lunar New Year holiday, a large number of mainland workers will return during the Spring Festival. Nomura estimates that the pneumonia epidemic in the next few weeks may worsen.
Nomura also pointed out that the proportion of the Mainland’s service industry in GDP has increased significantly compared to 2003. The service industry accounted for 53% of last year’s GDP, compared with 41% in 2002. The last SARS epidemic dragged down mainland GDP by about 2 percentage points. It is expected that this epidemic will be similar, but the bank believes that once the epidemic is under control, demand will be able to recover strongly. Nomura estimates that the Mainland will increase the provision of liquidity and credit to support economic performance. In the future, there will be opportunities to reduce standards, interest rates, and open market operations. It is expected that the People’s Bank of China will introduce looser credit targets to assist businesses and households.
Morgan Stanley also pointed out that the new pneumonia epidemic has the biggest impact on the tourism, entertainment and retail industries in the Mainland, and that factories have also been shut down, which has also affected industrial production and trade. If the epidemic reaches its peak in February or March, DMG expects China’s economic growth in the first quarter to fall by 0.5 to 1 percentage point quarterly; if it reaches its peak in March to April, it may drag down GDP growth in the first half of the year. 0.6 to 1.1 percentage points, but I believe some will be offset by stimulus policies.