Photo: GT

 
The trend of a progressing rally for the Chinese A-share market and its bonds market is not likely to be changed by the current novel coronavirus outbreak although the country’s GDP in the first quarter of 2020 faces rising pressure, Chinese analysts said.

"The market will encounter some downward pressure after the week-long Spring Festival holidays but its upward trend shall not change in the long run,” said Yang Delong, chief economist at the Shenzhen-based First Seafront Fund Management. 

The Hang Seng Index opened at 27,101.54 or 3.03 percent lower on the first trading day of the Year of Rat, with travel, consumption, and cinema among the biggest decliners.

Alibaba Pictures, Alibaba Group’s film and TV division, saw its shares dive by 5.5 percent. However, Chinese social media and gaming giant Tencent saw its shares up nearly 1 percent against the plummeting Hong Kong Hang Seng index on Wednesday. The firm’s mobile game "Peace Elite” encountered network failure, as a large number of people played it during the holidays.

China’s financial markets will remain closed until Monday, extending the break by three days as the country is grappling to contain the virus outbreak.

China is expected to strengthen its counter-cyclical adjustments to maintain steady economic growth this year as its GDP will be impacted in the first and second quarters due to the outbreak of the “devil” coronavirus, according to Yang.

The People’s Bank of China (PBC), the country’s central bank, said in a statement Tuesday it will use monetary policy tools, including open market operations to inject funds to keep banking system liquidity at a reasonably ample level.

PBC added the Spring Festival holidays for the interbank markets would be extended and resume trading on Monday.

The China Securities Regulatory Commission, the securities regulator, on Tuesday issued a circular urging all securities, funds, and futures institutions to encourage investors to trade off-site and provide technological support amid the novel coronavirus outbreak.