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China Market ends flat

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Headline indices of the Mainland China equity market closed virtually flat on Friday, 24 May 2019, helped by the central bank's campaign to boost sentiment. However market gains were marginal as investor sentiments were subdued on fears that the escalating U. S.-China trade war would stymie global economic growth. At closing bell, the benchmark Shanghai Composite Index edged up 0.02%, or 0.48 point, to 2,853. The Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 0.5%, or 7.34 points, to 1,496.03. The blue-chip CSI300 index rose 0.28%, or 9.95 points, to 3,593.91. Shanghai Composite Index was down 0.9% for the week.

Market risk sentiments stablised after a series of comments by central bank officials this week. China has ample policy tools to cope with yuan fluctuations and the country is able to keep the currency basically stable, central bank vice governor Liu Guoqiang said on Thursday.

Washington last week effectively banned U. S. firms from doing business with Huawei, the world's largest networking gear maker, citing national security concerns.

The U. S. Commerce Department said on Thursday it was proposing a new rule to impose anti-subsidy duties on products from countries that undervalue their currencies, in another move that could penalize Chinese products. China's Commerce Ministry hit back on Thursday, with its spokesman saying "if the United States wants to continue trade talks, they should show sincerity and correct their wrong actions."

Both Beijing and Washington have imposed tariffs on billions of dollars' worth of one another's goods since last year. The trade tensions have battered financial markets and dampened business sentiment. The situation escalated earlier this month as both sides hiked tariffs on their goods.

Shares of distilleries were higher on defensive buying. Liquor king Kweichow Moutai (600519 CH) was up 2.03% at 878.5 yuan.

Tech stocks related with Huawei Technologies' chip arm Huawei Hisilicon were the worst performing sector, as sentiment continued to be hurt by reports about UK-based ARM's plan to suspend business with Huawei and its subsidiaries, in order to comply with a recent US trade clampdown. Huizhong Instrumentation (300371 CH) locked 10% lower circuit at 11.64 yuan, and Hubei TKD Crystal Electronic Science and Technology (603738 CH) fell 10% daily limit to 13.88 yuan.

CURRENCY NEWS: China's yuan tad higher against the U. S. dollar on Friday, helped by the central bank's campaign to boost sentiment about the Chinese currency. In the spot market, onshore yuan opened at 6.9110 per dollar and was changing hands at 6.9110 at afternoon, 6 bps firmer than the previous late session close but 0.17% softer than the midpoint.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, May 24 2019. 14:41 IST
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