China Stocks gain on strong GDP data

The Mainland China share market closed higher on Monday, 18 January 2021, as investors cheered better-than-expected gross domestic product (GDP) data showing it expanded 6.5% in the fourth quarter of 2020, making the country one of the few in the world to register positive growth for the year.

However, market gains capped after reports that that the Trump administration notified Huawei suppliers, including chipmaker Intel, that it is revoking certain licenses to sell to the Chinese company and intends to reject dozens of other applications to supply the telecommunications firm.

At closing bell, the benchmark Shanghai Composite Index added 0.84%, or 29.85 points, to 3,596.22. The Shenzhen Composite Index, which tracks stocks on China's second exchange, rose 1.48%, or 34.92 points, to 2,401.78. The blue-chip CSI300 index climbed up 1.11%, or 60.44 points, to 5,518.52.

ECONOMIC NEWS: China GDP Climbs 6.5% On Year In Q4- China's gross domestic product climbed 6.5% on year in the fourth quarter of 2020, the National Bureau of Statistics said on Monday, up from 4.9% in the three months prior. On a seasonally adjusted quarterly basis, GDP expanded 2.6%, slowing from 2.7% in Q3.

CURRENCY NEWS: China's yuan eased to a one-week low against the dollar as the central bank set a softer midpoint. Prior to the market open, the People's Bank of China (PBOC) set the midpoint rate at a two-week low of 6.4845 per dollar, 212 pips or 0.33% weaker than the previous fix of 6.4633. The onshore yuan opened at 6.4793 per dollar, fell to a low of 6.4919, its lowest since Jan. 11, before paring some losses to 6.4858 by midday.

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