China Market gains as economy continues to bounce back from virus slump

The China share market finished session higher on Tuesday, 20 October 2020, as risk sentiments underpinned after latest official figures showed the world's second-biggest economy continues its recovery from the Covid-19 pandemic.

At closing bell, the benchmark Shanghai Composite Index advanced 0.47%, or 15.44 points, to 3,328.10. The Shenzhen Composite Index, which tracks stocks on China's second exchange, rose 1.33%, or 29.86 points, to 2,279.38. The blue-chip CSI300 index grew 0.8%, or 37.98 points, to 4,793.47.

The world's second-biggest economy saw growth of 4.9% between July and September, compared to the same quarter last year and following 3.2% growth in the second quarter. For the first three months of this year China's economy shrank by 6.8% when it saw nationwide shutdowns of factories and manufacturing plants. China is now leading the charge for a global recovery based on its latest gross domestic product (GDP) data.

China's trade figures for September also pointed to a strong recovery, with exports growing by 9.9% and imports growing by 13.2% compared to September last year.

CURRENCY NEWS: The yuan rose to a 19-month high versus the dollar inline with 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 a fresh 18-month high of 6.693 per dollar, 80 pips firmer than the previous fix of 6.701.The official guidance, set firmer than the key 6.7 per dollar level for the first time since April 2019, fuelled speculation whether the central bank would allow further strength in the yuan. The onshore spot yuan CNY=CFXS opened at 6.6800 per dollar, the strongest since March 21, 2019, and was changing hands at 6.6854 at midday, 41 pips weaker than the previous late session close.

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