China Market ends softer in lackluster trade

The Mainland China share market finished lackluster session marginally lower on Monday, 27 December 2021, as risk sentiments turned subdued after official data indicating that profits at China's industrial firms grew at a much slower pace in November. However, market losses were limited after the People's Bank of China pledged greater support for the real economy and it would make monetary policy more forward-looking and targeted.

At close of trade, the benchmark Shanghai Composite Index declined 0.06%, or 2.08 points, to 3,615.97. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 0.09%, or 2.24 points, to 2,494.20. The blue-chip CSI300 index declined 0.04%, or 2.02 points, to 4,919.32.

China's central bank has vowed to promote healthy development of the country's real estate market, saying it will safeguard the legal rights of home buyers and better satisfy their reasonable living needs. The statement from the People's Bank of China (PBOC), made following its fourth-quarter monetary policy committee meeting on Saturday, is the latest sign that Chinese regulators are marginally easing curbs on the property sector to prevent a hard-landing. Echoing China's annual Central Economic Work Conference held in early December, the PBOC said it will prioritise economic stability, amid an increasingly severe external environment and the unrelenting global pandemic.

ECONOMIC NEWS: China Industrial Profits Continue To Surge- China industrial profits increased by 38% on year to CNY 7.98 trillion in January-November 2021, following a 42.2% surge in the prior period and slowing for the 9th straight month, amid moderation in recovery momentum. Profits continued to grow for both state-owned industrial firms (65.8%) and private-sector (27.9%). In November alone, industrial profits rose 9% on year to CNY 805.96 billion, much softer than a 24.6% jump in October, due to tumbling prices of some raw materials, weaker consumer demand, and uncertainty in the property market.

CURRENCY NEWS: China's yuan was little changed against the U.S. dollar on Monday despite firmer mid-point fixing by the central bank. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.3686 per dollar, 6 pips firmer than the previous fix of 6.3692. In the spot market, the onshore yuan CNY=CFXS was changing hands at 6.3700 at midday, 28 pips weaker than the previous late session close.

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