China Stocks fall on policy tightening woes

The Mainland China share market finished session lower on Friday, 09 April 2021, due to concerns over policy tightening after latest official data showed Chinese consumer and producer inflation rising in March as compared with a year ago. Adding to the downbeat sentiment was deteriorating Sino-U.S. ties and decreasing foreign inflows into the A-share market.

At closing bell, the benchmark Shanghai Composite Index fell 0.92%, or 0.92 points, to 3,450.68. The Shenzhen Composite Index, which tracks stocks on China's second exchange, fell 0.95%, or 21.37 points, to 2,236.58. The blue-chip CSI300 index declined 1.5%, or 76.87 points, to 5,035.34.

China's producer prices rose 4.4 per cent in March from a year earlier, the biggest increase since July 2018, the statistics bureau said on Friday. Consumer inflation accelerated to 0.4 per cent in March. The rosy data added to other signs that the recovery at the world's second-largest economy has been gaining traction, increasing the odds that Beijing will put a brake on easy and cheap credit.

Adding to the downbeat sentiments was decreasing foreign inflows into the A-share market. Foreign investors' net buying in March totalled 18.7 billion yuan, down sharply from 41.2 billion yuan in February.

CURRENCY NEWS: China's yuan was flat against the dollar on Friday despite stronger mid-point fixing by the central bank. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate at 6.5409 per dollar, 54 pips or 0.08% firmer than the previous fix of 6.5463.

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