China Market falls on dismal PMI data

The Mainland China share market finished session lower on Thursday, 31 March 2022, as risk sentiment after both manufacturing and services PMI swung to negative territory amidst a harsh lockdown to combat the Covid-19 outbreak.

At close of trade, the benchmark Shanghai Composite Index fell 0.44%, or 14.39 points, to 3,252.20. The Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 0.92%, or 19.65 points, to 2,117.96. The blue-chip CSI300 index sank 0.74%, or 31.50 points, to 4,222.60.

Activity in Chinese manufacturing and services simultaneously contracted in March for the first time since the height of the country's COVID-19 outbreak in 2020. The NBS Manufacturing PMI fell to 49.5 in March from 50.2 in the previous month. The NBS Non-Manufacturing PMI suffered a sharper drop to 48.4 in March, from the previous reading of 51.6.

 

The world's second-largest economy is now at the risk of slowing sharply as authorities restrict production and mobility in many cities, including Shanghai and Shenzhen, to stamp out fresh COVID-19 outbreaks.

CURRENCY NEWS: China's yuan was down against the U.S. dollar despite firmer mid-point fixing by the central bank as fresh signs of economic slowdown and worries over wider disruption resulting from a recent COVID-19 resurgence. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.3482 per dollar, 84 pips firmer than the previous fix 6.3566. In the spot market, the yuan CNY=CFXS was trading at 6.3495 at midday, 10 pips weaker than the previous late session close.

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