China Stocks fall on profit taking

Mainland China share market finished session lower on Friday, 3 February 2023, as investors opted to book profit after China's stock benchmark jumped 7.4% last month on bets of China's strong rebound in holiday spending.

However, market losses capped after private sector survey showed China's services activity in January expanded for the first time in five months as spending and travel got a boost from the lifting of stringent COVID curbs.

At close of trade, the benchmark Shanghai Composite Index fell 0.68%, or 22.26 points, to 3,263.41. The Shenzhen Composite Index, which tracks stocks on China's second exchange, was down 0.42%, or 9.21 points, to 2,163.26. The blue-chip CSI300 index sank 0.95%, or 39.52 points, to 4,141.63.

ECONOMIC NEWS: China's service sector expanded for the first time in five months at the start of the year with the rollback of pandemic related restrictions, survey results from S&P Global showed on Friday. The Caixin services Purchasing Managers' Index climbed to 52.9 in January from 48.0 in December. The score exceeded the neutral 50.0 mark for the first time since August.

CURRENCY NEWS: China's yuan eased from a three-week high against the dollar on Friday, inline with softer mid-point fixing by China's central bank. Prior to market opening, the People's Bank of China (PBOC) set the yuan's midpoint rate CNY=PBOC at 6.7382 per dollar, weaker than the previous fix of 6.713.

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