China Market falls on power squeeze concerns

The Mainland China share market finished session down on Wednesday, 29 September 2021, as a wide range of issues met selling on fears over production curbs caused by a power crunch which has compelled numerous factories including come to a halt and ahead of a major holiday.

At closing bell, the benchmark Shanghai Composite Index declined 1.83%, or 65.92 points, to 3,536.29. The Shenzhen Composite Index, which tracks stocks on China's second exchange, shed 2.29%, or 55.04 points, to 2,347.16. The blue-chip CSI300 index dropped 1.02%, or 49.90 points, to 4,833.93.

Traders were worried about the state of power outages in mainland China after major manufacturing provinces started curbing electricity production to conserve energy for winter and to control emissions. The power shortage has hurt production and sparked widespread electricity curbs, dimming the economy's growth outlook.

The Chinese government is considering allowing power generators to charge higher prices for industrial consumers. The move is aimed at spurring producers to boost supply amid a power crisis that has disrupted production this month. On Wednesday, China's all-powerful economic planning agency attempted to reassure residents and businesses in areas hardest hit by shortages that it has the coal use and supply situation under close watch.

Investors were also focused ahead to the release of the manufacturing, non-manufacturing and Caixin manufacturing purchasing managers' indexes on Thursday.

Investors shunned industries vulnerable to power shortages, with non-ferrous metal, steel , chemicals plunging between 3% and 5%.

CURRENCY NEWS: China's yuan was up against the U.S. dollar on Tuesday, after firmer mid-point fixing by central bank. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.4662 per dollar, weaker than the previous day fix of 6.4608. In the spot market, the yuan CNY=CFXS opened at 6.4800 per dollar, the lowest level since August 27, and changed hands at 6.4674.

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