China Market falls on economy slowdown woes

The Mainland China equity market were lower on Friday, 26 October 2018, despite positive lead from Wall Street overnight, as market-support measures by the government failed to soothe investor worries about high leverage, economic growth slowdown, and the Sino-US trade war. In afternoon trades, the benchmark Shanghai Composite Index dropped 0.6%, or 15.14 points, to 2,588.66, meanwhile the Shenzhen Composite Index, which tracks stocks on China's second exchange, fell 0.3%, or 3.82 points, to 1,288.98. The blue-chip CSI300 index sank 1.04%, or 33.11 points, to 3,161.20.

On Thursday, China's banking and insurance regulator published a notice allowing insurance asset management firms to launch dedicated products that provide liquidity support to listed firms in a bid to reduce risks related to pledge shares.

NEWS FROM THE PRESS: Overseas investments face toughened scrutiny-- China tightened scrutiny of overseas investments by financial institutions using State-owned assets, intensifying its inspection of shareholders, funding sources and investment targets, as per China Daily reports. The newspaper cited Finance Minister Liu Kun as saying that the government was planning a national system to supervise State-owned financial capital. By the end of 2017, Chinese financial intuitions had invested 18.1 trillion yuan (US$2.6 trillion) in overseas institutions including opening offshore branches, an increase of 50 percent over 2013.

CURRENCY NEWS: China's yuan depreciated against the U.S. dollar on Friday, after soft mid-point fixing by central bank. Prior to market open, the People's Bank of China set the midpoint rate at 6.9510 per dollar, 101 basis points softer than the previous day's fix of 6.9409. In China's spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day.

OFFSHORE MARKET: US stock market closed higher on Thursday, thanks to Strong results from major companies including Microsoft and Visa. Some encouraging economic news helped stabilize markets. The Commerce Department said orders to U.S. factories for major manufactured goods grew in September, and the increase was larger than analysts expected. The Dow Jones Industrial Average jumped 401.13 points or 1.6% to 24,984.55. The tech-rich Nasdaq Composite Index plummeted soared 209.93 points or 3% to 7,318.34 and the broad-based S&P 500 surged up 49.47 points or 1.9% to 2,705.57.

European markets also ended higher on Thursday. The French CAC 40 Index surged by 1.6%, the German DAX Index jumped by 1%, and the U.K.'s FTSE 100 Index climbed by 0.6%.

Powered by Capital Market - Live News