(Bloomberg) -- Chinese shares tumbled and the yuan weakened 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 fell almost 9%, while local iron ore and copper futures declined by the daily limit. Equities came off their lows in Tokyo, Seoul and Sydney and fluctuated in Hong Kong. Oil erased declines, gold had a modest drop, 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 cut rates as it injected cash into the financial system on Monday, part of a slew of measures to shore up their financial markets.
“It’s not time to go back in and buy yet,” Andrew Harmstone, portfolio manager at Morgan Stanley Investment Management, told Bloomberg TV in Singapore. “We have to see more panic selling peak or some resolution of the virus” spreading, he said.
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. Indian bonds surged after the government refrained from announcing higher debt sales in Saturday’s budget.
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.
These were the main moves in markets:
Stocks
The MSCI Asia Pacific Index fell 0.8% as of 3 p.m. in Tokyo.Japan’s Topix index lost 0.7% at the close.Shanghai Composite Index fell 7.9%.Hong Kong’s Hang Seng Index rose 0.5%.South Korea’s Kospi index was little changed.Australia’s S&P/ASX 200 Index dropped 1.3%.Futures on the S&P 500 added 0.7%. The index declined 1.8% on Friday.Euro Stoxx 50 contracts rose 0.1%.
Currencies
The yen fell 0.2% to 108.53 per dollar.The offshore yuan fell 0.2% to 7.0141 per dollar.The euro bought $1.1084, down 0.1%.The pound lost 0.3% to $1.3163.
Bonds
The yield on 10-year Treasuries ticked up more than one basis point to 1.52%.Australia’s 10-year yield dropped three basis points to 0.93%.
Commodities
West Texas Intermediate crude added 0.1% to $51.62 a barrel.Gold fell 0.6% to $1,579.52 an ounce.
--With assistance from Haslinda Amin.
To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net
To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Andreea Papuc, Joanna Ossinger
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