China state media urges investors not to panic over market slide on coronavirus outbreak

FILE PHOTO - Investors sit in front of a board showing stock information at a brokerage house on the first day of trade in China since the Lunar New Year, in Hangzhou, Zhejiang province, China February 3, 2020. China Daily via REUTERS

SHANGHAI (Reuters) - Chinese state media outlets are calling on investors not to panic after financial markets tumbled on Monday amid concerns about the coronavirus spreading across the country.

An op-ed published on Tuesday in the state-backed Securities Times called the drop “normal” and compared it to similar market slumps after the outbreak of the SARS virus nearly 20 years ago and the Sept. 11, 2001 terror attacks on the United States.

On Monday, the first day of trading in China following the Lunar New Year Holiday, the Shanghai Composite index fell 8.7%.

“Such events are usually only a short-term interruption ... and do not have a lasting economic impact,” the op-ed said.

A similar piece published on Tuesday in the China Securities Journal, another state-affiliated paper, called the slide a “black swan” event that will not change the fundamentals of the market.

“The impact of the current epidemic ... is necessarily short-term. After release of pessimism, the stock market is expected to gradually stabilise,” the op-ed stated.

Reporting by Josh Horwitz; Editing by Kenneth Maxwell