China Market gains 0.93% on bargain hunting

The Mainland China equity market closed higher on Thursday, 08 August 2019, snapping a six-day, as investors chased for bottom fishing on heavily battered stocks after better-than-expected trade data, Ping An Bank's strong first-half result and the MSCI announcement on increased weighting of Chinese equities. China's central bank set the official reference rate for the yuan at weaker than 7 per dollar for the first time since 2008. Market gains were also supported by China's central bank set of the official reference rate for the yuan at weaker than 7 per dollar for the first time since 2008. At closing bell, the benchmark Shanghai Composite Index advanced 0.93%, or 25.87 points, to 2,794.56. The Shenzhen Composite Index, which tracks stocks on China's second exchange, rose 1%, or 15.01 points, to 1,498.95. The blue-chip CSI300 index added 1.32%, or 47.86 points, to 3,669.29.

The gains in the Mainland China market bolstered after Chinese customs data revealed exports for July rose unexpectedly, growing 3.3% on-year while imports for the month fell 5.6% on-year, which left China with a trade surplus of $45.06 billion, compared to a $50.98 billion surplus in June, despite a protracted trade war with the United States.

Ping An Bank (000001 CH) jumped 6.4% to 14.40 yuan on strong first-half result. Its net income for the first six months increased 15% from a year earlier to 15.4 billion yuan (US$2.19 billion), as net interest margins widened and the ratio of non-performing loans fell.

Chinese liquor distiller Xinjiang Yilite Industry (600197 CH) tumbled 8.4% to 15 yuan as the liquor producer said in its interim result that net income for the first six months fell 6.4% from a year earlier to 201.8 million yuan (US$28.7 million), after its revenue decreased 5.7%.

CURRENCY NEWS: China yuan depreciated against greenback on Tuesday, as central bank on Thursday set its official yuan midpoint below the key seven to the dollar threshold for the first time since global financial crisis. The People's Bank of China (PBOC) set the midpoint rate at 7.0039 per dollar prior to market open, 43 pips weaker than the previous fix of 6.9996, and was the weakest since April 21, 2008.

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