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Law360 (January 28, 2020, 5:02 PM EST) -- Chinese regulators on Tuesday urged securities firms to help investors respond rationally to the financial impact of the deadly coronavirus, which has rattled global markets as trading in China remains halted, while central bankers promised to provide "sufficient liquidity" when activity resumes.
Trading on the country's two main stock exchanges in Shanghai and Shenzhen is set to resume Monday — two working days later than originally planned — after the State Council of the People's Republic of China this week extended the annual Lunar New Year break in response to the pneumonia epidemic. The China Securities Regulatory Commission said in a statement Tuesday that brokerages should "guide rational investment" when trading continues.
Securities firms should "actively guide investors to rationally and objectively analyze the impact of the epidemic, adhere to the concept of long-term investment and value investment and carry out investment activities in accordance with laws and regulations," the CSRC said.
Regulators said all market participants should "take epidemic prevention and control as the most urgent task at present," including cleaning and disinfecting business premises. They also said trading facilities should submit application materials for administrative licenses over the internet.
The announcement came as the Dow Jones Industrial Average rebounded Tuesday, rising 187 points, one after day the index fell 454 points on fears that the impact of the coronavirus could hurt the global economy. Monday's decline was the index's worst one-day drop since October.
Reports on Tuesday said 106 people have died from the epidemic and more than 4,600 cases have been confirmed in mainland China, resulting in full or partial lockdowns in Chinese cities. The Centers for Disease Control and Prevention raised travel precautions to China to its highest level, recommending that travelers avoid all "nonessential" visits to China.
The new respiratory virus, first identified in Wuhan, Hubei Province, China, probably emerged from an animal source but now appears to be spreading from person to person, according to the CDC. Symptoms include severe respiratory illness with fever, cough and difficulty breathing
As China gets ready for the resumption of financial activity, the People's Bank of China on Tuesday pledged to use its monetary tools to provide "sufficient liquidity" given the "large amount of funds due after the market opens on February 3."
Trading on China's mainland last occurred Thursday.
--Editing by Stephen Berg.
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