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China Market extends gain on upbeat services sector survey

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The Mainland China equity market closed higher on Wednesday, 04 September 2019, as risk appetite buying underpinned after better than expected private services sector survey data and reports that the Hong Kong government would formally withdraw the proposed extradition bill. Market gains were, however limited amid lingering worries over a protracted Sino-U. S. trade war after the U. S. President Donald Trump on Tuesday warned he would be "tougher" on Beijing in a second term if trade talks dragged on. At closing bell, the benchmark Shanghai Composite Index inclined 0.93%, or 27.26 points, to 2,957.41. The Shenzhen Composite Index, which tracks stocks on China's second exchange, rose 0.67%, or 10.85 points, to 1,636.40. The blue-chip CSI300 index added 0.84%, or 32.39 points, to 3,886.

Activity in China's services sector expanded at the fastest pace in three months in August as new orders rose, prompting the biggest increase in hiring in over a year, a private survey showed.

The Caixin/Markit Services Purchasing Managers' Index came in at 52.1 in August, its highest since May. The 50-mark in PMI readings separates growth and contraction. Official data for August released over the weekend showed services sector activity picking up for the first time in five months in August.

Sentiment was also boosted by robust gains in Hong Kong stocks, after reports Hong Kong government will announce the formal withdrawal of an extradition bill that triggered months of unrest and has thrown the Chinese-controlled city into its worst crisis in decades

Traders kept an eye on risks from the ongoing rift between China and the United States, after U. S. President Donald Trump warned on Tuesday of a "tougher" stance on Beijing in a second term if trade talks dragged on. But poor U. S. economic data could damage Trump's re-election chances, forcing him to speed up the trade talks.

CURRENCY NEWS: China yuan edged up against greenback on Wednesday, after firmer mid-point fixing by central bank. Prior to market opening, the People's Bank of China set the midpoint at 7.0878 per dollar, 0.01% firmer than the previous fix.

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

First Published: Wed, September 04 2019. 17:30 IST
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