China Stocks rebound on Sino-U.S. tensions de-escalation

Mainland China share market finished session higher on Tuesday, 07 February 2023, snapping three days losing streak, as traders chased for bargain buying on heavily battered stocks amid hopes for a de-escalation in Sino-U.S. tensions.

At close of trade, the benchmark Shanghai Composite Index fell 0.76%, or 24.71 points, to 3,238.70. The Shenzhen Composite Index, which tracks stocks on China's second exchange, was down 0.84%, or 18.10 points, to 2,145.19. The blue-chip CSI300 index sank 1.32%, or 54.75 points, to 4,086.88.

Market sentiment improved as both Beijing and Washington appeared to show willingness to de-escalate after U.S. President Joe Biden said on Monday that bilateral relations had not been weakened by the United States' downing of a suspected Chinese spy balloon over the weekend.

CURRENCY NEWS: China's yuan strengthened against the dollar on Monday, despite 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 6.7967 per dollar, 230 pips or 0.34% weaker than the previous fix of 6.7737. In the spot market, the onshore yuan CNY=CFXS was changing hands at 6.7818 at midday, 170 pips firmer than the previous late-session close.

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