China's Stock Market Suffers The Least In Global Equities Sell-Off

Mar. 14, 2020 7:25 AM ETSPY, VT, YINN, MCHI, TDF, YANG, GXC, FXP, PGJ, CHN, CN, CXSE, XPP, YXI, FCA, WCHN, FLCH, KGRN9 Comments
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James Picerno
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Summary

  • China has been the epicenter for the coronavirus outbreak, but its stock market is suffering the least on a year-to-date basis through yesterday's close (Mar. 12) for the world's major equity market regions, based on a set of exchange-traded funds.
  • The iShares MSCI China ETF has lost 13.7% so far in 2020 through yesterday's close. That's a painful setback, but it's relatively modest compared with the rest of the field.
  • For much of the rest of the world, including the US and Europe, the outbreak is at an earlier stage.

China has been the epicenter for the coronavirus outbreak, but its stock market is suffering the least on a year-to-date basis through yesterday's close (Mar. 12) for the world's major equity market regions, based on a set of exchange-traded funds.

The iShares MSCI China ETF (MCHI) has lost 13.7% so far in 2020 through yesterday's close. That's a painful setback, but it's relatively modest compared with the rest of the field.

The global equity benchmark - Vanguard Total World Stock (VT) - is down nearly twice as much, posting a 25.4% year-to-date loss. The US market - in sharp contrast from a month ago - is down 22.9% in 2020 via SPDR S&P 500 (SPY). The worst-hit region: Latin America, which is groaning under a 43.1% collapse so far this year.

Why is the sell-off relatively modest for China's stock market? "We're better off than offshore markets in terms of virus outbreak containment, lower overall valuations and bigger policy room," opines Dai Ming, a fund manager with Hengsheng Asset Management Co. in Shanghai. "Chinese stocks will fare better than global peers despite some short-term pullback," he predicts.

Recent data on China's coronavirus outbreak suggest that infections may be peaking. Reuters today reports:

China's Wuhan city, ground zero of the new coronavirus outbreak, reported five new cases on Friday, the second day in a row the tally has been less than 10, while no locally transmitted infections were reported in the rest of the country.

Mi Feng, a spokesman for China's National Health Commission, says "broadly speaking, the peak of the epidemic has passed for China. The increase of new cases is falling."

For much of the rest of the world, including the US and Europe, the outbreak is at an earlier stage. Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases

This article was written by

James Picerno profile picture
5.85K Followers
James Picerno is a financial journalist who has been writing about finance and investment theory for more than twenty years. He writes for trade magazines read by financial professionals and financial advisers. Over the years, he’s written for the Wall Street Journal, Barron’s, Bloomberg Markets, Mutual Funds, Modern Maturity, Investment Advisor, Reuters, and his popular finance blog, The CapitalSpectator. Visit: The Capital Spectator (www.capitalspectator.com)

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