China Stocks gain on policy support hopes

The Mainland China share market finished session higher on Monday, 14 December 2020, as appetite for risk assets improved on hopes of more policy support to shore up the world's second-largest economy.

At closing bell, the benchmark Shanghai Composite Index was up 0.66%, or 21.93 points, to 3,369.12. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 1.07%, or 23.75 points, to 2,247.69. The blue-chip CSI300 index added 0.92%, or 45.21 points, to 4,934.84.

Market participants commenced trading with firm footing today after Finance Minister Liu Kun statement that China will step up fiscal policy support for a strategy to make its economy mainly rely on domestic demand, supply chains and innovation. China's President Xi Jinping on Saturday targeted a steeper cut in rates of carbon emissions relative to economic activity by 2030 and set new goals for growth in renewable energy and forest stock.

China has unveiled a "dual circulation" strategy for the next phase of economic development in which it will rely mainly on "domestic circulation" - the internal cycle of production, distribution, and consumption, supported by innovation and upgrades in the economy.

CURRENCY NEWS: China's yuan strengthened against the dollar as the central bank set a firmer midpoint. Prior to the market opening, the PBOC set the midpoint rate CNY=PBOC at 6.5361 per dollar, 44 pips firmer than the previous fix of 6.5405. The spot market CNY=CFXS was changing hands at 6.5391, 0.11% stronger than the previous late session close of 6.5463.

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