China Market ends higher

The China share market finished session higher on Monday, 10 August 2020,as investors risk appetite buying underpinned on sign of recovery from the coronavirus pandemic after China's factory deflation eased in July, driven by a rise in global oil prices and as industrial activity climbed back towards pre-coronavirus levels. However, worries over a potential flare up in Sino-U.S. tensions before a bilateral meeting later this week capped gains.

At closing bell, the benchmark Shanghai Composite Index inclined 0.75%, or 25.22 points, to 3,379.25. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 0.21%, or 4.76 points, to 2,277.42 and the blue-chip CSI300 index rose 0.36%, or 16.94 points, to 4,724.87.

Market gains propelled by sign of recovery from the coronavirus pandemic after China's factory deflation eased in July, driven by a rise in global oil prices and as industrial activity climbed back towards pre-coronavirus levels.

However, market gains were somewhat capped amid heightened U.S.-China tensions. The world's two largest economies are scheduled to talk on Aug. 15 to review the trade agreement signed in January, with tensions running high after U.S. President Donald Trump signed executive orders banning WeChat and TikTok in 45 days' time and announcing sanctions on senior Chinese and Hong Kong officials.

The President Trump issued executive orders that are set to ban American use of WeChat and TikTok, taking effect from the middle of next month. Following that, the Trump administration said it will impose a fresh round of sanctions on 11 individuals, including Hong Kong leader Carrie Lam. The sanctions came ahead of a Taiwan visit on Monday by U.S. Health Secretary Alex Azar, the highest-level U.S. official to visit the island in four decades. China has condemned the trip and promised retaliation.

ECONOMIC NEWS: The producer price index (PPI) fell 2.4% from a year earlier in July, the National Bureau of Statistics (NBS) said in a statement on Monday (Aug 10), compared with a 3% drop in June.

China Consumer Prices Up 2.7% On Year In July- Consumer inflation also picked up in July as the bad weather pushed food prices higher. The consumer price index (CPI) rose 2.7% from a year earlier, its fastest pace in three months and compared with a 2.5% rise in June, the National Bureau of Statistics said on Monday. On a monthly basis, inflation rose 0.6% following the 0.1% decline in the previous month.

CURRENCY NEWS: The yuan was steady against greenback on Monday, despite softer mid-point fixing by central bank. Prior to the market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.9649 per dollar, 241 pips or 0.35% weaker than the previous fix of 6.9408.

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