China Market extends gains to third day

The Mainland China share market finished higher for third straight session on Thursday, 09 December 2021, as investors sentiments continued to boost from Beijing's recent easing signals. At close of trade, the benchmark Shanghai Composite Index surged 1.18%, or 42.48 points, to 3,637.57. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 1.77%, or 43.80 points, to 2,521.29. The blue-chip CSI300 index was up 1.5%, or 73.83 points, to 4,995.93.

Beijing's signals this week that it will provide more liquidity for banks while easing curbs on the real estate industry is stoking optimism that a long-running campaign to deleverage the economy may be coming to an end.

The People Bank of China cut the reserve requirement ratio (RRR) for major commercial banks by 0.5%age points on Monday, releasing 1.2 trillion yuan (US$188 billion) worth of long-term liquidity into the interbank system on December 15 with an aim of supporting the Chinese economy in the face of growing headwinds. The latest RRR cut should benefit A-shares more than other markets as they are more sensitive to domestic liquidity conditions.

ECONOMIC NEWS: China Consumer Prices Up 2.3% On Year In November- China consumer prices were up 2.3% on year in November, the National Bureau of Statistics said on Thursday, up from 1.5% in October. On a monthly basis, inflation rose 0.4% but slowing from 0.7% in the previous month. Producer prices jumped 12.9% on year, down from 13.5% a month earlier.

CURRENCY NEWS: China's yuan was little changed against the U.S. dollar on Thursday, 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 6.3498 yuan per dollar, 179 pips, or 0.28%, stronger than the previous fix of 6.3677. In the spot market, the onshore yuan CNY=CFXS was changing hands at 6.3442 at midday, 4 pips weaker than the previous late session close.

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