China Market extends gain on bargain hunting

Headline indices of the China share market closed higher on Tuesday, 10 July 2018, as bargain hunting continued for second straight session after a week of savage selling, with shares in real estate and transport firms being notable gainers. The market buying spree was supported by reports that securities regulator said on Sunday that China planned to allow more foreign individual investors to trade A-shares. However, market gains were limited amid concerns of more retaliatory measures as promised by U.S. President Donald Trump. At the close, the benchmark Shanghai Composite Index inclined 0.44%, or 12.52 points, to 2,827.63, meanwhile the Shenzhen Composite Index, which tracks stocks on China's second exchange, grew 0.71%, or 11.24 points, to 1,585.78. The blue-chip CSI300 index rose grew 0.24%, or 8.34 points, to 3,467.52.

The rebound followed a week of savage selling. Chinese markets fell in the run-up to Friday's imposition of tariffs on US$34 billion worth of Chinese goods, which was immediately matched by equivalent tariffs from China on U.S. products.

Major Chinese ports started clearing goods from the US on Monday, according to three sources, as new tariffs on US imports, including agriculture goods, seafood and vehicles, went into effect on Friday.

CURRENCY: Chinese yuan strengthened against greenback, due to firmer mid-point fixing by central bank and some easing of market fears over an escalating Sino-U.S. trade dispute. Prior to market opening on Tuesday, the People's Bank of China set the midpoint rate at 6.6259 per dollar, 134 pips or 0.2 percent firmer than the previous fix of 6.6393. In the spot market, the onshore yuan opened at 6.6018 per dollar and was changing hands at 6.6040 at midday, 77 pips firmer than the previous late session close and 0.33 percent stronger than the midpoint.

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