China Market extends gain

The Mainland China equity market closed higher for second straight session on Tuesday, 03 December 2019, as investors continued hunting for firms with low valuations following recent upbeat factory data. Market was also underpinned by robust northbound inflows via the Stock Connect linking Hong Kong and Shanghai, which totalled 4.6 billion yuan for the day, as foreign investors increase their China exposure. At closing bell, the benchmark Shanghai Composite Index inclined 0.31%, or 8.89 points, to 2,884.70. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 0.55%, or 8.73 points, to 1,605.33. The blue-chip CSI300 index grew 0.4%, or 15.03 points, to 3,851.09.

Factory activity in China unexpectedly returned to growth in November for the first time in seven months, as domestic demand picked up on Beijing's accelerated stimulus measures to steady growth. The closely watched Purchasing Managers' Index (PMI), a key gauge of activity in the country's factories, rose to 50.2 in November, up from 49.3 last month, China's National Bureau of Statistics said on Saturday. Separately, a private survey on Monday showed China's manufacturing activity expanded more than expected in November as the Caixin/Markit manufacturing Purchasing Managers' Index (PMI) came in at 51.8 from 51.7 in October.

Shares of auto parts sector rose on report released by China's Ministry of Industry and Information Technology that the proportion of new energy car sales will increase to about 25 percent by 2025. In 2018, 1.3 million new energy vehicles were sold in China, accounting for 4.6% of total vehicle sales, according to China Association of Automobile Manufacturers. Yangzhou Yaxing Motor Coach (600213 CH), Automotive Tech (300643 CH), Shanghai Baolong (603197 CH), and Beijing Jingcheng Machinery Electric (600860 CH) jumped 10%.

CURRENCY NEWS: China's yuan appreciated against the dollar on Tuesday after the People's Bank of China (PBOC) set firmer mid-point fixing andweakness in the greenback in overseas markets on worries about new fronts in the U.S. trade war. Prior to the market open, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 7.0223 per dollar, 39 pips firmer than the previous fix of 7.0262. In the spot market, onshore yuan CNY=CFXS opened at 7.0420 per dollar and was changing hands at 7.0397 at midday, 12 pips firmer than the previous late session close.

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