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China Market rebounds on bargain hunting

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The Mainland China equity market closed modest higher on Wednesday, 18 September 2019, as investors chased for bottom fishing following losses previous day, amid hopes of lower borrowing costs at home and US- China trade relations improvement. At closing bell, the benchmark Shanghai Composite Index rose 0.25%, or 7.54 points, to 2,985.66. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 0.26%, or 4.25 points, to 1,655.61. The blue-chip CSI300 index rose 0.48%, or 18.86 points, to 3,910.08.

Market pundit expects People's Bank of China (PBOC) likely to set Loan Prime Rates (LPRs) lower at Friday's monthly fixing. A cut in LPRs - China's benchmark rates for new loans - could lead to lower borrowing costs for consumers and companies in a slowing economy.

Investors are also closely monitoring development in the U. S.-China trade talks. U. S. and Chinese deputy trade negotiators are due to meet in Washington this week, to the pave way for high-level talks in early October.

U. S. President Donald Trump said on Tuesday his administration could seal a deal on trade with China before the U. S. presidential election, or an agreement could be reached the day after voters go to the polls.

Liquor distillers led the pack in the mainland on expectations that industry juggernaut Kweichow Moutai will increase supply in the fourth quarter. The stock gained 5% to a record 1,148.90 yuan. Smaller rivals Wuliangye Yibin rose 3.1% to 135.56 yuan and Luzhou Laojiao added 2.7% 90.20 yuan.

Shares of energy companies declined after crude Oil futures fell as much as 1.2% on Wednesday after tumbling 5.7% a day earlier as Saudi Arabia said it had already restored 41% of the capacity at an oil-processing complex that was attacked by a drone earlier this week. China Petroleum & Chemical Corp, also known as Sinopec, fell 1.7% to 5.07 yuan and PetroChina, the nation's biggest oil producer, slipped 1.4% to 6.33 yuan.

Sou Yu Te Group surged by the 10% daily limit to 2.62 yuan after the clothes maker said it had agreed to set up a supply-chain unit with an investment arm of the Guangzhou municipal government. Sou Yue Te will hold a 40% stake in the 80 million-yuan (US$11.3 million) joint venture, it said in an exchange statement.

Beijing HualuBaina Film & TV surged 8.3% to 6.27 yuan after the filmmaker said its biggest shareholder Infore Investment Holdings had boosted its stake in the company by 1%.

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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 18 2019. 17:57 IST
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