China Shanghai Composite ends below key 3,000 level

Mainland China equity market finished session down on Monday, 23 December 2019, as greater trade optimism between the Washington and Beijing was countered by news that China's state-backed semiconductor fund plans to reduce holdings in some tech firms. At closing bell, the benchmark Shanghai Composite Index declined 1.4%, or 42.19 points, to 2,962.75. The Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 1.92%, or 32.58 points, to 1,667.71. The blue-chip CSI300 index was down by 1.25%, or 50.15 points, to 3,967.10.

Sentiment was boosted by the trade optimism after US President Donald Trump said on Friday that he had a very good talk with China's leader Xi Jinping about the so-called phase one trade deal they struck in mid-December. That indicated more progress has been made after they reached the initial agreement. The president said in a tweet that China has started large scale purchases of US agricultural products, and a formal deal signing is being arranged. On Saturday, he said both countries would very shortly sign the deal.

Meanwhile, China's state-backed semiconductor fund over the weekend announced plans to reduce holdings in some tech firms. The National Integrated Circuitry Investment Fund, also known as the "Big Fund", planned to cut its stakes in Gigadevice Semiconductor, chipmaker Shenzhen Goodix Technology, and Hunan Goke Microelectronics by about one percentage point each.

Three semiconductor stocks fell as the China Integrated Circuit Industry Investment Fund said it would cut stakes in them. Gigadevice Semiconductor (603986 CH) shed 6.7% to 182.3 yuan. Shenzhen Goodix Technology (603160 CH) lost 5.1% to 194.4 yuan. Hunan Goke Microelectronics (300672 CH) sank 10% to 39.56 yuan.

CURRENCY NEWS: The yuan was quoted at 7.011 per US dollar, 0.06% weaker than the previous close of 7.0065.

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