China Market trades softer on US delisting fears

The Mainland China equity market edged lower after floating in and out of the boundary line on Monday, 30 September 2019, as risk sentiments were subdued ahead of a week-long patriotic holiday in China and fears of a fresh escalation in its trade war with the US after news that the U.S. administration is considering delisting of Chinese firms. Market losses were, however, capped after the release of better-than-expected Manufacturing Purchasing Managers' Index (PMI) data. The technology, finance and distillery sectors led the falls amid fears of delisting of Chinese firms by US authorities. Around late afternoon, the benchmark Shanghai Composite Index eased 0.08%, or 2.27 points, to 2,929.89. The Shenzhen Composite Index, which tracks stocks on China's second exchange, slid 0.13%, or 2.08 points, to 1,610.18. The blue-chip CSI300 index fell 0.14%, or 5.56 points, to 3,847.09. The Asian giant celebrates 70 years since the founding of communist China on Tuesday, with markets taking a break from 1 October 2019 to 7 October 2019.

Traders risk sentiments were discouraged by fears of an escalation in Sino-U.S. trade tensions after news that the U.S. administration is considering de-listing Chinese companies to limit U.S. investment in Chinese companies. High level talks are still expected to take place on October 10 and 11.

The release of better-than-expected Manufacturing Purchasing Managers' Index (PMI) data capped selloff. The manufacturing purchasing managers index rose to 49.8 in September from 49.5 in August, according to the National Bureau of Statistics released on Monday. A subindex measuring total new orders received by manufacturers in China rebounded to 50.5 in September from 49.7 in August. China's official nonmanufacturing PMI, also released Monday, edged down to 53.7 from 53.8 in August. Meantime, private business survey showed China's factory activity unexpectedly expanded at the fastest pace in 19 months in September as plants ramped up production and new orders rose. The Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) for September rose to 51.4 from 50.4 in August, marking the second straight month of expansion. The 50-mark separates expansion from contraction on a monthly basis.

CURRENCY NEWS: The Chinese yuan was little changed on Monday. The USD/CNY pair last traded at 7.1226, up 0.02%.

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