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China Socks extend losses on policy tightening woes

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The Mainland China share market finished session lower on Tuesday, 23 February 2021, as worries over policy tightening continued to weigh on sectors with lofty valuations.

At closing bell, the benchmark Shanghai Composite Index declined 0.17%, or 6.05 points, to 3,636.36. The Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 0.85%, or 20.65 points, to 2,396.01. The blue-chip CSI300 index fell 0.32%, or 17.66 points, to 5,579.67.

The trend of China's policy tightening is quite evident and definite, though the PBOC would refrain from sudden and fast tightening with an aim to provide stability for the market.

China's central bank said it would prioritise policy stability and avoid making sudden shifts, while providing the support needed for a continued economic recovery in 2021.

The People's Bank of China mopped up a net 260 billion yuan (US$40.2 billion) of liquidity from the financial system on last Thursday, stoking concerns that policymakers may have started dialling back their accommodative stance after getting the pandemic under control. The central bank has also lowered lending quota in a move seen as reining in asset speculation.

CURRENCY NEWS: China's yuan firmed up against the dollar after stronger mid-point fixing by the central bank. Before the market open, the People's Bank of China (PBOC) set the yuan's daily midpoint CNY=PBOC at 6.4516 per dollar, firmer than the previous 6.4563. Spot yuan CNY=CFXS opened at 6.4581 per dollar and was changing hands at 6.4584 around midday, 62 pips stronger than Monday's late session close.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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First Published: Tue, February 23 2021. 17:11 IST
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