Shuli Ren, Columnist

How Can the Coronavirus Possibly Be Good for Stocks?

China’s markets have rallied, despite a rising death toll and the economy operating at half-speed. A slowing crackdown on shadow banking could explain it.

February 7, 2020 at 1:56 AM UTC

By Shuli Ren

Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. A former investment banker, she was a markets reporter for Barron’s. She is a CFA charterholder.

Seeing green.
Photographer: STR/AFP via Getty Images

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It seems inconceivable that the coronavirus outbreak, which has killed more than 600 people and shut down two-thirds of China’s economy, could be bullish for stocks. Yet Shenzhen’s private sector-heavy ChiNext Index not only brushed away a selloff earlier this week, but also hit a three-year high Thursday.

The most obvious explanation? This epidemic is giving policymakers the opportunity to correct past mistakes without looking silly.