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Covid-19, caused by the SARS-CoV-2 virus, has now been around since 3 months. European stock markets have crashed very hard, US-stock market has crashed hard, but the Chinese Stock market on the other hand seems to have not been affected by the whole thing at all.

Hangseng Index (02.12.2019 - 31.03.2020): -10,74 %

Shanghai Composite Index (02.12.2019 - 31.03.2020): -4,36 %

Comparison:

Eurostoxx 50 Index (02.12.2019 - 31.03.2020): -23,62 %

S&P 500 Index (02.12.2019 - 31.03.2020): -15,65 %

Why is that? Is it a sign that the European and US stock markets are overreacting?

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Good question, here are 2 (among many) possible answers:

  1. The Chinese Government seems to manage the stock market directly at times. I.e. There are stories (like the one above) where the governments doesn't allow funds or brokers to sell. That level of control likely wouldn't happen in the USA.

  2. Maybe their Central Bank stepped in more quickly/strongly. Although I suspect a larger part of your answer is in #1 above, than #2 here.

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