China Market extends gains to fourth straight session

The China share market finished higher for the fourth straight session on Wednesday, 05 August 2020, as risk sentiments upped on hopes for a gradual recovery in the Chinese economy after latest data showed that China's services sector continued to grow in July but at a slower pace than in June. However, market gains were limited after reports that the world's two largest economies will hold high-level talks on August 15 to review Beijing's compliance with the phase-one trade deal signed by the two nations.

At closing bell, the benchmark Shanghai Composite Index added 0.17%, or 5.88 points, to 3,377.57. The Shenzhen Composite Index, which tracks stocks on China's second exchange, rose 0.8%, or 18.42 points, to 2,318.93. The blue-chip CSI300 index grew 0.03%, or 1.31 points, to 4,777.11.

The Caixin/Markit services Purchasing Managers' Index (PMI) was at 54.1, above 50 signals expansion. But the gauge slipped from 58.4 in June, a record high in more than a decade. The sector accounts for about 60% of the economy.

Senior U.S. and Chinese officials will review the implementation of their Phase 1 trade deal on Aug. 15. The talks will come as US-China tensions have worsened, and Chinese vice-premier Liu He, who has led the talks on the Chinese side, will voice Beijing's concerns on Washington's recent sanctions on Chinese tech companies.

ECONOMIC NEWS: China Caixin Services Sector Expansion Slows In July - China services sector continued to expand in July, with a PMI score of 54.1, the latest survey from Caixin revealed on Wednesday. That's down from the 10-year high of 58.4 in June, although it remains above the boom-or-bust line of 50 that separates expansion from contraction. Mild capacity pressures were signaled by the latest data, as backlogs of work increased for a second month in succession. Growth was linked by panelists to the latest gains in incoming new work. Also, the composite PMI came in at 54.5, down from 55.7 in the previous month.

CURRENCY NEWS: The yuan hit a near five-month high against the dollar on Wednesday, on deepening greenback weakness and as a scheduled U.S.-China trade meeting. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.9752 per dollar, 51 pips or 0.07% firmer than the previous fix of 6.9803.

Powered by Capital Market - Live News