BANGKOK -- The Shanghai Composite index tumbled 8.7% Monday then rebounded slightly as Chinese regulators moved to stabilize markets reopening from a prolonged national holiday despite a rising death toll from a new virus that has spread to more than 20 countries.
After nosediving on the open, the Shanghai Composite was down 8.1% at 2,734.66 by midday, steadied by the central bank, which on Sunday announced it was injecting 1.2 trillion yuan into the markets to ensure there would be enough cash. The benchmark for China's smaller market, in Shenzhen, was down 8.3%.
China's central bank announced plans Sunday to inject 1.2 trillion yuan into the markets to cushion the shock from the outbreak of a new virus when trading resumed. The Lunar New Year holiday, usually a week long, had been prolonged by three days as a precaution. China's communist leaders have massive resources for intervening to staunch panic selling of shares and have deployed them in past times of crisis, including the global financial meltdown and the 2002-2003 outbreak of SARS, or severe acute respiratory syndrome. Most of the country's largest companies and financial institutions are state-controlled.
In a separate statement Saturday, the PBOC said financial institutions should follow local quarantine regulations and try to minimize gatherings to reduce risks of spreading the virus. That includes allowing rotating shifts, working online from home and other strategies, it said.
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