China Market gains on upbeat industrial profits data

The China share market finished session higher on Monday, 27 July 2020, as investor sentiment underpinned after National Bureau of Statistics data showed that domestic industrial profits for a second straight month in June and at the fastest pace in more than a year, adding to signs that an economic recovery from the coronavirus crisis is gaining momentum. However, market gains were capped by rising Sino-U.S. tensions.

At closing bell, the benchmark Shanghai Composite Index added 0.26%, or 8.46 points, to 3,205.23. The Shenzhen Composite Index, which tracks stocks on China's second exchange, rose 0.28%, or 6.02 points, to 2,144.37. The blue-chip CSI300 index grew 0.51%, or 22.86 points, to 4,528.45.

The statistics bureau said on Monday that profits at China's industrial firms rose 11.5% year-on-year in June to 666.55 billion yuan ($95.27 billion) - marking the quickest profit growth since March 2019. For January-June, industrial firms' profits fell 12.8% year-on-year to 2.51 trillion yuan, but easing from a 19.3% dive in the first five months. Steel, oil and gas extraction, oil refining and non-ferrous metals saw significant improvements in profit in June with manufacturing costs easing and demand improving. Earnings at China's state-owned industrial firms were down 28.5% on year for the first six months, after slumping 39.3% in January-May, the statistics bureau data showed. Private sector profits fell 8.4% in January-June, narrowing from January-May's 11.0% fall. The industrial profit data covers large firms with annual revenue over 20 million yuan from their main operations.

China on Monday said it had taken over the premises of the U.S. consulate in the southwestern city of Chengdu after ordering the facility be shut in retaliation for being ousted from the Chinese consulate in Houston, Texas.

CURRENCY NEWS: The People's Bank of China set the midpoint rate CNY=PBOC at 7.0029 per dollar prior to market open, 0.13% weaker than prior day fixing of 6.9938.

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