China Market falls on profit taking

The Mainland China share market finished session lower on Thursday, 26 August 2021, as investors locked in gains after the market surged over the past three days and on caution regarding clarity on regulatory reforms and their impact on the technology sector. Traders are also turning to the Federal Reserve's annual Jackson Hole symposium this weekend for the clues on any possible cutback in its bond purchase stimulus.

At closing bell, the benchmark Shanghai Composite Index declined 1.09%, or 38.72 points, to 3,501.66. The Shenzhen Composite Index, which tracks stocks on China's second exchange, fell 1.53%, or 37.94 points, to 2,437.16. The blue-chip CSI300 index dropped 1.97%, or 96.55 points, to 4,801.61.

 

Market sentiments dampened amid lingering concerns about regulatory clampdown and how much that has weighed on corporate earnings. China has cracked down on private tutoring, brought monopolistic tech giants to their knees, and stepped up curbs on home-buying. Gaming regulation and tighter control of content dissemination are on the way, and the word 'Common Prosperity' is being used more and more in government speeches indicating higher taxes and more redistribution.

Investors are closely eyeing the Fed's Jackson Hole symposium on Friday for clues on the timing of a tapering of monetary stimulus.

CURRENCY NEWS: China yuan was down against the dollar on Thursday, after softer than expected mid-point fixing by central bank. Prior to the market opening, the People's Bank of China (PBOC) set the midpoint CNY=PBOC at 6.4730 per dollar prior to the market open, barely changed from the previous fix of 6.4728. In the spot market, onshore yuan opened at 6.4744 per dollar and was changing hands at 6.4823 at midday, 64 pips weaker than the previous late session close.

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