The Mainland China equity market closed higher on Monday, 15 July 2019, as risk appetite buying underpinned on reinforcing expectations of more stimulus measures after second-quarter gross domestic product (GDP) grew at its weakest pace in nearly three decades. At closing bell, the benchmark Shanghai Composite Index rose 0.4%, or 11.64 points, to 2,942.19. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 1%, or 15.57 points, to 1,572.34. The blue-chip CSI300 index rose 0.41%, or 15.46 points, to 3,824.19.
The world's number-two economy expanded 6.2% in April-June, the worst reading since the early 1990s, the China's statistics bureau said on Monday, amid weak domestic and external demand and a damaging trade war with the United States. GDP data marked a further loss of momentum for the economy from the first quarter's 6.4%, adding to expectations that Beijing needs to announce more support measures to boost consumption and investment and restore business confidence.
Tariff hikes by President Donald Trump have battered Chinese as well as U.
S. exporters, and Chinese leaders have increased spending and loosened controls on bank lending to keep growth within this year's range of 6% to 6.5%, down from the 6.6% growth China put up in 2018.
There were bright spots for the economy in Monday's economic data. Industrial output rose 6.3% in June, from 5% in May, which was the slowest increase since 2002. Fixed-asset investment also picked up, rising 5.8% on-year in January-June, from 5.6% in January-May. Retail sales grew 9.8% on-year in June, up from 8.6% in May.
CURRENCY NEWS: China yuan strengthened against greenback on Monday, after economic growth data met market expectations, while encouraging retail sales and factory output numbers pointed to some stabilisation. Prior to the market opening, the People's Bank of China (PBoC) set the midpoint rate at 6.8677 per dollar, slight weaker than the previous fix of 6.8662. In spot market trade, the yuan opened at 6.8790 per dollar and was changing hands at 6.8745 around late afternoon.
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