China Stocks extend gains

The Mainland China share market finished session higher on Monday, 08 June 2020, as risk sentiments boosted up after poor domestic trade data reinforced hopes for further policy stimulus to shore up the coronavirus-stricken economy. At closing bell, the benchmark Shanghai Composite Index added 0.24%, or 6.97 points, to 2,937.77. The Shenzhen Composite Index, which tracks stocks on China's second exchange, rose 0.01%, or 0.28 points, to 1,856.89. The blue-chip CSI300 index was up 0.52%, or 20.70 points, down at 4,021.95.

Chinese trade data published on Sunday revealed the impact from the coronavirus crisis. Exports contracted in May as global lockdowns continued to sink demand, while a sharper-than-expected fall in imports pointed to mounting pressure on manufacturers as world growth stalls.

China's posted a record trade surplus of $62.93 billion last month, compared with $45.34 billion surplus in April, as exports in May fell a less-than-expected 3.3% compared with a year earlier, but imports plunged 16.7%, the General Administration of Customs said. China's trade surplus with the United States widened to $27.89 billion in May.

The new export orders component of the official manufacturing purchasing managers' index (PMI) was 35.3 for May, following a 33.5 reading in April. A number below 50 signifies contraction, the further below 50, the worse the mood among producers. The Caixin/Markit manufacturing PMI, a survey of smaller factory owners, reported on Monday that new export orders contracted at a historically sharp rate.

The sombre trade readings for the world's second-biggest economy could pile pressure on policymakers to roll out more support for a sector that is critical to the livelihoods of more than 180 million workers.

CURRENCY NEWS: The yuan weakened against the dollar on Monday, despite firmer mid-point fixing by central bank, due to on fresh U.S. tariff threats and seasonal pressures after China's trade surplus hit a new high in May.. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 7.0882 per dollar, 0.12% firmer than the previous fix of 7.0965.

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