China Market rebounds on bargain hunting

The Mainland China share market finished session higher on Tuesday, 19 October 2021, clawing back yesterday losses, as investors chased for bargain hunting on expectations that the stresses in the domestic property sector as well as Sino-U.S. tensions are easing. Most of sectors advanced, with shares in consumer staples and agriculture companies being notable gainers.

At closing bell, the benchmark Shanghai Composite Index advanced 0.7%, or 25.02 points, to 3,593.15. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 0.86%, or 20.60 points, to 2,422.64. The blue-chip CSI300 index increased 0.98%, or 47.94 points, to 4,922.72.

China's central bank calmed markets late last week saying spillover effects from the China Evergrande Group's debt woes were controllable. A couple of other property firms made coupon payments this week, helping ease some concerns about the embattled and indebted sector.

Consumer staples stocks gained on bottom fishing after sharp drop in the previous session as the sector was spooked by Xi Jinping's call for the expansion of a consumption tax.

Shares of energy firms climbed up, led by coal miners as China's coking coal and coke futures jumped to record highs amid a short supply.

Shares of real estate firms lost, as investors continue to digest Beijing's property tax plans and growing signs of weakness in China's housing market.

CURRENCY NEWS: China's yuan rose against the U.S. dollar on Tuesday, despite weaker mid-point fixing by central bank. Prior to the market opening, the People's Bank of China (PBOC) set the midpoint CNY=PBOC at 6.4307 per dollar, 7 pips weaker than the previous fix of 6.43. In the spot market, onshore yuan CNY=CFXS was changing hands at 6.4107 at late afternoon, 189 pips or 0.29% firmer than the previous late session close.

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