January 22, 2020 / 2:48 AM / 6 months ago

China stocks sink to 2020 low as Wuhan virus spreads

HONG KONG, Jan 22 (Reuters) - The Chinese stock market fell to its lowest level so far this year on Wednesday, battered by fears over the spread of a new virus that has killed nine people so far.

The Shanghai Composite Index dropped as much as 1.5% and the blue-chip CSI300 Index lost almost 1.7% in early trade, taking both benchmarks to year-to-date lows.

Yields on safe-haven Chinese 10-year government bonds dipped below 3% for the first time since August and treasury futures climbed.

Chinese biotech firms and drug makers, whose shares surged on feverish buying on the back of the outbreak, have urged investors to be prudent.

Cases of infection ballooned to 440 across China, an official said on Wednesday morning. It has spread from Wuhan, central China, to as far as the United States.

The virus struck as millions of Chinese prepared to travel for the Lunar New Year, heightening contagion risks.

“If the pneumonia couldn’t be contained in the short term, we expect China’s retail sales, tourism, hotel and catering, travel activities likely to be hit, especially in Q1 and early Q2,” analysts at UBS said in a note on Wednesday.

Reporting by Noah Sin; Editing by Jacqueline Wong

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