China Socks tumble 1%

The Mainland China share market finished session lower on Monday, 15 March 2021, as risk aversion selloff triggered on policy tightening fears after the latest industrial production to retail sales data beat economists' forecasts and as neutral stance by the People's Bank of China.

At closing bell, the benchmark Shanghai Composite Index declined 0.96%, or 33.13 points, to 3,419.95. The Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 2.13%, or 47.32 points, to 2,172.94. The blue-chip CSI300 index fell 2.15%, or 110.84 points, to 5,035.54.

Investors refrained from sectors with high valuations and shift towards cyclical players that benefit from an economic recovery. China's industrial output growth quickened in January-February, beating expectations, as the vast manufacturing sector started 2021 on a firm footing. Also, the neutral stance by the People's Bank of China bolstered expectations that a liquidity tightening trend was intact as the economy improves.

 

Market favourites, or so-called bubble stocks, were slammed again in rotation play. Battery maker Contemporary Amperex Technology fell 8.5% to 312.30 yuan in Shenzhen. Liquor distiller Kweichow Moutai fell 2.5% to 1,975.45 yuan in Shanghai, while China Tourism Group Duty Free dropped 3.8% to 297.80 yuan.

CURRENCY NEWS: China's yuan inched up against the dollar on Monday. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.501 per dollar, 165 pips or 0.25% weaker than the previous fix of 6.4845. In the spot market, onshore yuan CNY=CFXS opened at 6.4950 and was changing hands at 6.5032 at midday, 56 pips firmer than the previous late session close.

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