China Market gains after encouraging trade data

Mainland China equity market closed higher on Tuesday, 14 April 2020, as better than expected prints of China trade numbers for March and hopes that coronavirus (COVID-19) is near to the peak pleased the share buyers. At closing bell, the benchmark Shanghai Composite Index advanced 1.59%, or 44.24 points, to 2,827.28. The Shenzhen Composite Index, which tracks stocks on China's second exchange, increased 2.22%, or 37.96 points, to 1,745.42. The blue-chip CSI300 index surged 1.93%, or 72.44 points, to 3,825.70.

Stocks were helped by better-than-expected trade data for March from Chinese customs officials. China's exports were down 6.6% in dollar terms in March compared with a year ago, the General Administration of Customs announced on Tuesday. That was considerably better than the expected 14% drop. In another promising sign, China's imports fell 0.9% in March from a year earlier, much better than the expected decline of 9.5%. That appeared to indicate that Chinese factories were loading up on materials to process as their overseas competitors began to shut down because of the coronavirus pandemic. The modest fall in imports was also striking because China the world's largest importer of oil, iron ore and other raw materials has been the biggest winner from recent plunges in global oil prices.

Markets have closely monitored China's trade data expecting it to reflect how the country's broader economy has fared since the authorities ordered gradual work resumption to limit the economic damage caused by the epidemic.

For the moment, sentiment continues to be driven by hopes for a quick recovery from coronavirus disruptions, along with unprecedented fiscal and monetary support measures rolled around the world.

CURRENCY NEWS: China's yuan edged up against the dollar on Tuesday, despite China central bank fixed softer mid-point rate. The strength in yuan was supported by China's better-than-expected trade data which somewhat calmed investor worries over business disruption caused by the coronavirus outbreak. Prior to market opening, the People's Bank of China (PBOC) set the yuan's midpoint rate CNY=PBOC at 7.0406 a dollar, 106 pips or 0.15% weaker than the previous fix of 7.03. In the spot market, onshore yuan CNY=CFXS opened at 7.0500 a dollar and was changing hands at 7.0447, firmer by 83 pips than the previous late session close.

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