Log in
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 

MarketScreener Homepage  >  Indexes  >  USA  >  S&P 500    SP500

S&P 500

News SummaryAll newsNews of the components ofMarketScreener Strategies

China stocks down but more resilient than peers in virus sell-off

share with twitter share with LinkedIn share with facebook
share via e-mail
03/25/2020 | 03:08am EDT
FILE PHOTO: Pedestrians wearing face masks ride an escalator near an overpass with an electronic board showing the Shanghai and Shenzhen stock indexes in Shanghai

Effective containment of the coronavirus outbreak and the promise of policy stimulus have led to Chinese stocks faring better than their global peers this year, even as foreign investors pull out of the market.

Foreign portfolio outflows from mainland markets are set to hit a monthly record, with investors rushing for the safety of U.S. dollars as global equities markets tumble.

As of Tuesday, the S&P500 index and the MSCI world price index <.MIWO00000PUS> have both slumped nearly 30% since Feb. 20, when coronavirus fears first gripped markets. By comparison, China's benchmark Shanghai index fell about 15% between mid-January and its trough in mid-March.

(Graphic: China stocks firmer relatively outperform as virus rocked world markets in the past month - https://fingfx.thomsonreuters.com/gfx/buzzifr/16/12/12/China%20stocks%20firmer%20relatively%20outperform%20as%20virus%20rocked%20world%20markets%20in%20the%20past%20month.png)

A key reason for the relative resilience of the A-share market is Beijing's effectiveness in controlling the virus outbreak and a peaking of infections on the mainland, analysts said.

Another is the hope for more fiscal and monetary policy measures to shore up demand as Beijing strives for a speedy recovery from a likely deep economic contraction in the first quarter.

Chinese policymakers have already implemented a raft of measures to support the economy.

(Graphic: China Feb producers prices fell back into deflation - https://fingfx.thomsonreuters.com/gfx/buzzifr/15/9781/9781/China%20Feb%20producers%20prices%20fell%20back%20into%20deflation.png)

The measures are expected to include more spending by local governments on infrastructure, a sector that was used by Beijing to bolster growth during the 2008 global financial crisis.

It is essential that the authorities prop up the traditional infrastructure sector to shore up the economy, said Niu Chunbao, chief investment officer at Wan Ji Asset, a Shanghai-based private equity fund.

(Graphic: Investors chase China's infrastructure firms on stimulus hopes - https://fingfx.thomsonreuters.com/gfx/buzzifr/15/9785/9785/Investors%20chase%20China's%20infrastructure%20firms%20on%20stimulus%20hopes.png)

Another reason for the more limited losses in Chinese stocks is their lower valuations.

A-shares are relatively cheaper while their Wall Street peers were at record highs before the slump, said Fu Yanping, analyst with China Galaxy Securities.

(Graphic: China stocks relatively less hit due partly to lower valuations - https://fingfx.thomsonreuters.com/gfx/buzzifr/16/13/13/China%20stocks%20relatively%20less%20hit%20due%20partly%20to%20lower%20valuations.png)

Foreign investors have, however, been heavy sellers in the A-share market in recent weeks, as tumbling global markets and a dash for dollars forced massive liquidation of stocks, bonds and emerging market currencies.

As of Friday, net selling by foreign investors via the Stock Connect scheme totalled about 70 billion yuan ($9.91 billion). That makes it likely March will see the biggest monthly selling since the launch of the scheme, which allows overseas investors convenient access to China's equities market.

Consumer stocks, one of foreign investors' heaviest exposure in the A-share market, suffered steep losses in the past month.

The outflows were exacerbated by a weaker yuan, which posted its worst week in seven months last week as the dollar surged.

Separately, Chinese funds that facilitate domestic investment in overseas stock and bond markets have been inundated by investors eager to buy on the cheap.

(Graphic: Foreign net selling via Stock Connect set for monthly record - https://fingfx.thomsonreuters.com/gfx/buzzifr/15/9931/9931/Foreign%20net%20selling%20via%20Stock%20Connect%20set%20for%20monthly%20record.png)

(Graphic: China's consumer firms among most sold as foreign investors retreat - https://fingfx.thomsonreuters.com/gfx/buzzifr/15/9933/9933/China's%20consumer%20firms%20among%20most%20sold%20as%20foreign%20investors%20retreat.png)

(Graphic: China's yuan weakens against U.S. dollar on cash crunch - https://fingfx.thomsonreuters.com/gfx/buzzifr/15/9928/9928/China's%20yuan%20weakens%20against%20U.S.%20dollar%20on%20cash%20crunch.png)

(Editing by Vidya Ranganathan and Jacqueline Wong)

By Luoyan Liu and Andrew Galbraith

Stocks mentioned in the article
ChangeLast1st jan.
ALPHABET INC. 1.08% 1433.52 Delayed Quote.7.03%
APPLE INC. -0.10% 317.94 Delayed Quote.8.27%
DJ INDUSTRIAL -0.07% 25383.11 Delayed Quote.-11.06%
EURO / US DOLLAR (EUR/USD) 0.17% 1.11344 Delayed Quote.-0.86%
FACEBOOK -0.16% 225.09 Delayed Quote.9.67%
KWEICHOW MOUTAI CO.,LTD. 1.68% 1366.6 End-of-day quote.15.52%
MSCI AC WORLD INDEX (STRD, UHD) 0.04% 509.47 Real-time Quote.-9.87%
NASDAQ 100 1.47% 9555.524843 Delayed Quote.9.42%
NASDAQ COMP. 1.29% 9489.872484 Delayed Quote.5.77%
PETROCHINA COMPANY LIMITED -0.93% 4.25 End-of-day quote.-27.10%
S&P 500 0.48% 3044.31 Delayed Quote.-5.77%
WORLD CO., LTD. -3.03% 1567 End-of-day quote.-41.77%
share with twitter share with LinkedIn share with facebook
share via e-mail
Latest news on S&P 500
09:08aWALL STREET WEEK AHEAD : Investors eye consumer discretionary stocks as U.S. reo..
05:45aWALL STREET STOCK EXCHANGE : U.S. Stocks Are Outpacing the Rest of the World
05/30WHAT'S NEWS : Business & Finance -- WSJ
05/29Wall Street ends mostly higher as U.S.-China spat simmers
05/29Stocks end mostly higher on Trump China comments
05/29WALL STREET STOCK EXCHANGE : Stocks Notch Big Monthly Gains
05/29Stocks rebound on relief at Trump's response to China over Hong Kong
05/29Stocks rebound on relief at Trump's response to China over Hong Kong
05/29Stocks rebound on relief at Trump's response to China over Hong Kong
05/29WALL STREET STOCK EXCHANGE : Stocks End May With Big Monthly Gains
More news
Chart S&P 500
Duration : Period :
S&P 500 Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends S&P 500
Short TermMid-TermLong Term
Top / Flop S&P 500
NORTONLIFELOCK INC. 22.78 Delayed Quote.8.79%
REGENERON PHARMACEUTICALS 612.81 Delayed Quote.5.98%
MARKETAXESS HOLDINGS INC. 508.59 Delayed Quote.5.19%
CITRIX SYSTEMS, INC. 148.12 Delayed Quote.4.91%
CISCO SYSTEMS, INC. 47.82 Delayed Quote.4.88%
HARLEY-DAVIDSON, INC. 21.34 Delayed Quote.-9.00%
APACHE CORPORATION 10.79 Delayed Quote.-9.10%
NORDSTROM, INC 16.13 Delayed Quote.-10.98%
COTY INC. 3.63 Delayed Quote.-13.37%
DXC TECHNOLOGY COMPANY 14.21 Delayed Quote.-14.24%
Heatmap :