Equity market should fear coronavirus threat to China GDP

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Equity market should fear coronavirus threat to China GDP

China_stocks_PAImages_5Feb2020
Chinese investors discuss about stock index and prices of shares (red for price rising and green for price falling) at a stock brokerage house in Nanjing city, east China's Jiangsu province, 11 November 2019. Major Chinese stock indices ended lower Monday, with the benchmark Shanghai Composite Index down 1.83 percent, at 2,909.97 points. The Shenzhen Component Index closed 2.17 percent lower at 9,680.57 points. The combined turnover of stocks on the two exchanges stood at 423 billion yuan (about 60.5 billion U.S. dollars), shrinking from 449.4 billion yuan in the previous trading day. | Imaginechina/SIPA USA/PA Images

A fall in equity markets last week reflected an automatic reaction to the possibility of a new global pandemic. But the more substantial effect of the coronavirus outbreak on equities may be reflected in economic performance, rather than the rate of contagion.

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