China Market extends gain

The China share market finished higher for second session in row on Tuesday, 18 August 2020, as sentiments continued to be buoyed by the People's Bank of China move to inject 700 billion yuan ($101 billion) of one-year funding through a medium-term lending facility to financial institutions steady at 2.95% to combat the economic fall out of the coronavirus pandemic. However, market gains capped amid lingering tensions between Washington and Beijing.

At closing bell, the benchmark Shanghai Composite Index was up 0.36%, or 12.29 points, to 3,451.09. The Shenzhen Composite Index, which tracks stocks on China's second exchange, rose 0.49%, or 11.11 points, to 2,298.45. The blue-chip CSI300 index fell 0.05%, or 2.47 points, to 4,812.76.

Tensions between Washington and Beijing continued to weigh on investor sentiments. U.S. President Donald Trump's administration announced Monday a further tightening of restrictions on Huawei, aimed at limiting the Chinese telecommunications giant's access to commercially available chips. That development came after Trump issued an executive order Friday forcing China's ByteDance to sell or spin off its U.S. TikTok business within 90 days.

Four companies debuted in the mainland, with chip-maker Verisilicon Microelectronics Shanghai rocketing 284% on the Star Market, where there are essentially no limits on price movements during the first week. Nanya New Material Technology, which manufactures circuit boards and other electronic components, closed with a 88.8% gain. Hubei Juneyao Big Healthy Drinks and auto parts maker Kunshan Huguang Auto Harness soared by the daily upside limit on most boards of 44%.

CURRENCY NEWS: The yuan was up against greenback on Tuesday, inline with firmer 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 a new five-month high of 6.9325 per dollar, 37 pips or 0.05% firmer than the previous fix of 6.9362. The spot yuan CNY=CFXS ended the domestic trading session at 6.9257 per dollar, its strongest close since Jan. 22.

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