China Market rises 0.85%

The Mainland China share market finished session higher on Wednesday, 04 August 2021, as investors chased for bargain buying after private survey showed growth in China's services sector accelerated in July. However, market gains were capped by investor worries over widening outbreaks of the highly contagious Delta variant in China and their potential impact on economic growth in the second half of the year.

At closing bell, the benchmark Shanghai Composite Index advanced 0.85%, or 29.23 points, to 3,477.22. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 1.72%, or 41.65 points, to 2,465.62. The blue-chip CSI300 index was up 0.9%, or 44.39 points, to 4,978.85.

The higher close on Mainland A-share market came as China poised to quicken spending on infrastructure projects while the central bank would support with modest easing steps, as risks from the Delta variant and flooding threaten to slow the economic recovery.

ECONOMIC NEWS: The Caixin/Markit services Purchasing Managers' Index (PMI) rose to 54.9 in July, the highest since May and up from 50.3 the previous month. The 50-point mark separates growth from contraction on a monthly basis. A sub-index of new business in the Caixin survey stood at 54.5 in July, up from 50.5 the previous month. Caixin's July composite PMI, which includes both manufacturing and services activity, rose to 53.1 from June's 50.6.

CURRENCY NEWS: China yuan edged up against the dollar on Wednesday, despite lower mid-point fixing by central bank. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate at 6.4655 per dollar, 45 pips or 0.07% weaker than the previous fix of 6.461. In the spot market, onshore yuan opened at 6.4652 per dollar and was changing hands at 6.4608 at midday, 92 pips firmer than the previous late session close.

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