China Market falls on US executive order

The China share market finished session lower on Friday, 07 August 2020, due to spike in Sino-US tensions after U.S. President Donald Trump on Thursday issued executive orders banning U.S. transactions with Chinese tech firms Tencent and ByteDance.

At closing bell, the benchmark Shanghai Composite Index declined 0.96%, or 32.43 points, to 3,354.04. The Shenzhen Composite Index, which tracks stocks on China's second exchange, fell 1.38%, or 31.86 points, to 2,272.66 and the blue-chip CSI300 index shed 1.15%, or 54.83 points, to 4,707.93.

U.S. President Donald Trump issued two executive orders late Thursday giving American citizens 45 days to sever all relationships with WeChat, owned by Tencent Holdings, and TikTok, owned by ByteDance. The ban has brought the trade tensions between the world's leading economies back to the centre of all attention and inflaming nerves ahead of what's probably going to be a crucial week in U.S.-China relations. The two countries are set to review the implementation of their Phase 1 trade deal on Aug. 15.

The executive orders, which go into effect in 45 days, come after the Trump administration said this week it was stepping up efforts to purge "untrusted" Chinese apps from U.S. digital networks and called TikTok and WeChat "significant threats." The ban will attract retaliation from Beijing.

CURRENCY NEWS: The yuan eased against greenback, despite firmer mid-point fixing by central bank as greenback, as deteriorating Sino-U.S. relations dented investor sentiment. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.9408 per dollar, 30 pips or 0.04% firmer than the previous fix of 6.9438, and was the strongest since March 10. The onshore yuan CNY=CFXS opened at 6.9559 per dollar and was changing hands at 6.9723 at midday, 185 pips weaker than the previous late session close. The spot yuan hit a high of 6.9350 per dollar on Thursday, the strongest level since March 10.

Powered by Capital Market - Live News