China Market falls on fresh COVID restriction

Mainland China share market finished session below boundary line on Thursday, 03 November 2022, as investor sentiment turned sour after government once again imposed lockdown in several cities across the country and also ramped up COVID restrictions to fight a surge in fresh cases. Also weighing the sentiments was a private survey report showing that China's services sector shrank more than expected in October.

The downbeat sentiment also came as the US Federal Reserve's latest decision to hike rates by 75 basis points for the fourth straight time.

At close of trade, the benchmark Shanghai Composite Index declined 0.19%, or 5.56 points, to 2,997.81. The Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 0.04%, or 0.82 point, to 1,967.38. The blue-chip CSI300 index decreased 0.81%, or 29.91 points, to 3,647.90.

Chinese authorities imposed lockdowns on the district in Zhengzhou city where 600,000 people in the area surrounding the world's largest iPhone factory on Wednesday, as workers complained of disorderly Covid controls at the facility. As per reports that local authorities would "thoroughly disinfect" Foxconn's facilities, including employee dormitories, over the next three days. Workers quarantining at the factory would need to show seven days of negative tests before leaving for their hometowns.

CURRENCY NEWS: China's yuan depreciated to 15-year low against the dollar on Thursday, after weaker midpoint fixing by China's central bank, after Federal Reserve rate decision. Prior to the market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 7.2472 per dollar, 0.38% weaker than the previous fix 7.2197. In the spot market, the onshore yuan CNY=CFXS was changing hands at 7.3036, 146 pips or 0.2% weaker than the previous late session close.

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