Major stocks on the Shanghai and Shenzhen bourses went up on February 4. Meanwhile, the official number of 2019-nCoV-infected has surpassed 20,000 globally, with the majority in the quarantined city of Wuhan and scattered across China.
On the day after another ‘Black Monday’ in China’s capital market, the country’s stocks bounced back for a modest recovery. The Shanghai Composite Index (000001:SH) added 1.34%; the Shenzhen Composite (399106:SZ) grew by 1.80%, with the ChiNext (399006:SZ), a technology stock-oriented board, trading 4.84% above its February 3 closing price.
The Star Market, which, in its sudden fall Monday, lost CNY 164.52 billion (USD 23.53 billion), or nearly 14.1% of its current total market cap, turned out to be a hasty climber a day later: the new board-listed stocks became 10.43% more expensive on average, boosting the combined value of the 77 firms by CNY 119.98 billion (USD 17.15 billion) to CNY 1.12 trillion (USD 160.43 billion).
The tide didn’t lift all boats though: the overhyped (and then, of course, overpriced) biotech stocks that once swelled when the entire market plummeted, took the reverse direction this time as well. Genetic engineering enterprise Amoytop Biotech (688278:SH) dipped by 2.61%; biopharma company BrightGene Bio-Medical (688166:SH) lost 2.58%; Guangzhou-based Jiete Biology (688026:SH), which makes face masks, fell by 2.59%; influenza virus kit producer Bioperfectus (688399:SH) retreated by 2.02%.
While we are witnessing a (quite predictable) clear-cut distinction between the biotech shares’ trading patterns and the rest of the mainland’s stock market, there are also some rattles. One example is Xiaomi-backed software developer Kingsoft Office (688111:SH): it peaked at CNY 206.28 (USD 28.50) apiece in the afternoon session, becoming the second-largest firm on the Shanghai bourse’s sci-tech board to date.
Other big dogs also did well. China’s semiconductor industry flagships Montage Technology (688008:SH), AMEC (688012:SH) and Amlogic (688099:SH) went up 13.89%, 18.20% and 9.87% respectively. Transsion soared by 17.76%. Lithography equipment maker KINGSEMI (688037:SH) punched the +20% ceiling and halted trading; so did UCloud (688158:SH).
(Check out how these and other ‘China’s Nasdaq’-listed stocks behaved last year.)
As global investors are increasingly anxious about the market uncertainties caused by the epidemic, it is also still unclear whether China can successfully contain it, shielding the entire planet from a pandemic. Tech giants and institutional investors have begun donating generously to help combat the disease. At the same time, many of their international counterparts are freezing their operations in China and implementing drastic measures, including employee travel restrictions.