China Market end lower in cautious trade

The Mainland China share market finished session lower on Monday, 27 September 2021, as risk aversion selloff continued after China extended its crackdown to digital currencies, with investors monitoring stocks related to embattled developer China Evergrande Group following the firm's Friday warning that it was in a serious shortage of funds.

At closing bell, the benchmark Shanghai Composite Index declined 0.84%, or 30.24 points, to 3,582.83. The Shenzhen Composite Index, which tracks stocks on China's second exchange, fell 1.14%, or 27.68 points, to 2,406.56. The blue-chip CSI300 index added 0.58%, or 27.94 points, to 4,877.37.

Market risk sentiments were downbeat as China's efforts to inject more liquidity into the banking system failed to spur risk appetite amid a liquidity crunch at Evergrande. The People's Bank of China pumped 100 billion yuan (US$15.5 billion) into the local banking system through open market operations on Monday, supplementing net liquidity injection of 510 billion yuan in the preceding six days.

Meanwhile, fears of power crunch in China also weighed down sentiments. Industrial production in several provinces has been hit by power supply shortages. China's National Energy Administration has told on Sunday to coal and natural gas companies to increase their output to ensure the country has sufficient energy supplies to keep homes warm during winter.

Shares of materials finished down as China's power crunch, caused by tight coal supplies and toughening emissions standards, has triggered a contraction in heavy industry across several regions. Aluminum Corporation of China fell by 10%.

CURRENCY NEWS: China's yuan was up against the U.S. dollar on Monday, despite firmer mid-point fixing by central bank. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.4695 per dollar, weaker by 0.15% from the previous fix of 6.4599. In the spot market, the yuan CNY=CFXS was stood at 6.4572, up by 970 pips from the previous late session close.

Powered by Capital Market - Live News