March 18, 2020 / 7:40 AM / 21 days ago

China stocks give up early gains to end lower as virus worries dominate

SHANGHAI, March 18 (Reuters) - China stocks reversed earlier gains to end lower on Wednesday, tracking losses in wider Asian markets as persistent worries over the rapid spread of the coronavirus outside China dashed risk sentiment.

** The blue-chip CSI300 index fell 2.0% to 3,636.26, while the Shanghai Composite Index dropped 1.8% to 2,728.76.

** Both indexes gained more than 1% in early morning trade as Beijing signalled support for its financial markets to weather the economic hit from the virus pandemic.

** The high volatility in overseas markets due to a continued virus contagion outside China and an oil price war has had a negative impact on China’s capital markets, Shen Yandong, an analyst with Vanho Securities, wrote in a note.

** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 3.34%, while Japan’s Nikkei index closed down 1.68%.

** Investors need to be cautious for the moment given the uncertainties, the analyst added.

** Goldman Sachs said on Tuesday that China’s economy will likely shrink 9% in the first quarter, underscoring how the coronavirus has disrupted normal business activities.

** Meanwhile, imported virus cases in China outnumbered those due to local transmission for the fifth straight day as infected travellers passed through major Chinese transportation hubs in Beijing, Shanghai, Guangzhou and Shenzhen.

** At 0707 GMT, the yuan was quoted at 7.0221 per U.S. dollar, 0.23% weaker than the previous close of 7.006. (Reporting by Luoyan Liu and Andrew Galbraith; Editing by Devika Syamnath)

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