The Mainland China equity market closed higher for third straight session on Tuesday, 05 November 2019, as investors risk sentiments underpinned on increasing optimism about the prospects for a Sino-US trade deal. Meanwhile, buying momentum supported further after Beijing's latest policy easing to boost the economy after a private survey showed sluggish growth in the country's services sector. At closing bell, the benchmark Shanghai Composite Index advanced 0.54%, or 16.07 points, to 2,991.56. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 0.54%, or 8.90 points, to 1,655.61. The blue-chip CSI300 index grew 0.62%, or 24.69 points, to 4,002.81.
China's central bank cut the interest rate on its medium-term lending facility on Tuesday for the first time since early 2016, as policymakers work to prop up a slowing economy hit by weaker demand at home and abroad. The cut came after a private survey showed China's services sector activity expanded at its slowest pace in eight months in October as new orders slowed and business confidence hit a 15-month low. Beijing has been counting on the services sector, which accounts for more than half of China's economy, to partly offset sluggish domestic and global demand for manufactured products as a prolonged trade war with the United States drags on.
On the trade front, Chinese President Xi Jinping on Tuesday called for consultation and cooperation to resolve international disputes. Xi's remarks, made at the opening ceremony of the China International Import Expo. That came following recent positive developments regarding the ongoing U. S.-China trade war. The U. S.
Commerce Secretary Wilbur Ross said on Sunday that U. S.-China trade deal expected to be signed between U. S. President Donald Trump and Chinese President Xi Jinping. Ross said the agreement could be reached by the two leaders in one of several locations, including Iowa, Alaska, Hawaii or somewhere in China.
The deal was originally anticipated to be inked at this month's Asia-Pacific Economic Cooperation summit in Chile, an event that has since been cancelled due to protests in the country. China said Friday it reached a consensus with the U. S. in principle following talks last week. Last month, U. S. President Donald Trump said both sides had come to a very substantial phase one trade agreement that is expected to be signed later in November.
CURRENCY NEWS: China's yuan was little changed against greenback on Tuesday, after the central bank set tad weaker mid-point fixing. Prior to market opening, the People's Bank of China set the midpoint rate CNY=PBOC at 7.0385 per dollar prior to market open, barely weaker than the previous rate of 7.0382. In the spot market, the yuan was quoted at 7.0224 per U. S. dollar, 0.12% firmer than the previous close of 7.0305.
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