China Stocks fall as Ukraine escalation rattles sentiment

The Mainland China share market finished session down on Tuesday, 22 February 2022, due to an escalation in geopolitical tensions around Ukraine after Russian President Vladimir Putin ordered forces into two breakaway regions of eastern Ukraine, following a Monday announcement that he would recognize their independence.

However, market losses caped after the Chinese Finance Minister Liu Kun comments that China will implement bigger cuts in taxes and fees this year while strengthening coordination between fiscal and monetary policy.

At close of trade, the benchmark Shanghai Composite Index was fell 0.96%, or 33.47 points, to 3,457.15. The Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 1.23%, or 28.50 points, to 2,297.30. The blue-chip CSI300 index sank 1.3%, or 60.16 points, to 4,574.15.

Investors rushed to safe-haven assets amid heightened market anxiety after Russian President Vladimir Putin ordered troops into breakaway regions of eastern Ukraine. Investors worry that a war between Ukraine and Russia could prolong elevated inflation in developed economies by disrupting supplies of important commodities. Russia is among the world's largest suppliers of oil, as well as the biggest exporter of wheat, and a major metals producer. Ukraine is a major world supplier of corn and wheat.

Also, investors continue to try to assess by how much and how quickly the Federal Reserve will raise interest rates to tame inflation. Some Fed officials have pushed back against expectations that they will begin raising interest rates in March with a larger increase in the benchmark rate, while others have left the door open.

CURRENCY NEWS: China's yuan weakened against the dollar on Tuesday after softer mid-point fixing by central bank. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.3487 per dollar, 0.14% down than yesterday's fix of 6.3401. Spot yuan CNY=CFXS was changing hands at 6.344 at late afternoon, 0.14% softer than the previous late session close.

Powered by Capital Market - Live News