China Market ends firmer as GDP target meets expectation

Mainland China share market finished session modestly higher on Tuesday, 05 March 2024, after Premier Li Qiang set countrys target for economic growth this year around 5% at a key parliament meeting, in line with expectations. However, market gains capped as China's week-long annual session of parliament commenced without any big-ticket stimulus plans to prop up the struggling economy.

At close of trade, the benchmark Shanghai Composite index increased 0.28%, or 8.49 points, to 3,047.79. The Shenzhen Composite Index, which tracks stocks on China's second exchange, fell 0.59%, or 10.21 points, to 1,718.31. The blue-chip CSI300 index jumped 0.7%, or 24.64 points, to 3,565.51.

Beijing set a 5% target for its gross domestic product this year.The economy expanded at a 5.2% annual rate last year after growth dipped to 3% in 2022.

Premier Li Qiang, addressing the opening meeting of China's National People's Congress, said Beijing would issue 1 trillion yuan ($139 billion) in long-term bonds to help bridge funding gaps, provide support to financially strapped local governments and invest in both advanced technology and in social support and education. Li also said China would expand government-subsidized housing, part of a program aimed at reversing a downturn in the property market after a crackdown on excess borrowing caused dozens of developers to default on their debts.

CURRENCY NEWS: China's yuan was steady against the dollar on Tuesday, as softer midpoint fixing. Prior to the market's opening, the People's Bank of China set the midpoint rate at 7.1027 per U.S. dollar, 7 pips weaker than the previous fix 7.102. In the spot market, the onshore yuan CNY=CFXS yuan was changing hands at 7.1977 at midday, only 9 pips stronger than the previous late session close.

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