China: Market ends in green

Headline indices of the Mainland China equity market closed higher after recouping initial losses on Wednesday, 10 April 2019, thanks to strength in consumer and healthcare companies which offset losses in the other sectors. Local market lost ground in early trading amid worries over global economic growth. At closing bell, the benchmark Shanghai Composite Index inclined 0.07%, or 2.27 points, to 3,241.93. The Shenzhen Composite Index, which tracks stocks on China's second exchange, fell 0.21%, or 3.73 points, to 1,779.28. The blue-chip CSI300 index added 0.26%, or 10.42 points, to 4,085.85.

Market participants appetite for risk assets were subdued after the International Monetary Fund (IMF) cut its forecast for world economic growth this year, saying the global economy is slowing more than expected and that a sharp downturn could require world leaders to coordinate stimulus measures. The world economy will grow 3.3% this year, down from the 3.5% the IMF had forecast for 2019 in January, the fund said Tuesday in its latest World Economic Outlook. The 2019 growth rate would be the weakest since 2009, when the world economy shrank. It's the third time the IMF has downgraded its outlook in six months. The global volume of trade in goods and services will increase 3.4% this year, weaker than the 3.8% gain in 2018 but reduced from the IMF's January estimate of 4%, the fund's report showed.

The IMF cut its forecast for U.S. growth to 2.3% this year, down 0.2%age point since the IMF's last global outlook in January. The downgrade reflects the impact of the partial government shutdown that ended in January, as well as lower-than-expected public spending. The IMF slashed its outlook for the euro area to 1.3% this year, down 0.3 point from three months ago. The IMF cut its outlook for U.K. growth to 1.2% this year, down 0.3 point from three months ago. The IMF raised its forecast for Chinese growth by 0.1 point to 6.3% this year, while lowering its projection for growth in Japan by 0.1 point to 1%. The fund cut its outlook for India's growth this year to 7.3%, down from 7.5% in January.

U.S. data overnight added to the cautious mood, with job openings dropping to an 11-month low in February and raising doubts about the strength of U.S. labor market, which has so far been one of the few bright spots in the economy.

Global trade anxiety was another sore point for risk asset markets. U.S. President Donald Trump threatened to impose tariffs on $11 billion worth of European Union products, heightening tensions over a long-running transatlantic aircraft subsidy dispute. The move came as markets remain on edge as negotiators try to hammer out trade deals with China and neighbours Mexico and Canada.

CURRENCY NEWS: China's yuan was down against the U.S. dollar on Wednesday, despite firm mid-point fixing by central bank, as investors stayed on the sidelines ahead of key economic data, which will give markets a read on state of the world's second-largest economy. China is due to release its March trade, inflation and loan growth data this week. Prior to market opening on Wednesday, the People's Bank of China (PBOC) set the midpoint rate at 6.7110 per dollar, 32 pips, or 0.05 percent, firmer than the previous fix of 6.7142. In the spot market, onshore yuan opened at 6.7134 per dollar and was changing hands at 6.7140 at midday, 20 pips weaker than the previous late session close. The onshore spot yuan swung in an extremely tight range of about 50 pips, similar to moves seen on Tuesday.

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