China Stocks extends losses on COVID-19 woes

The Mainland China share market finished session down on Tuesday, 29 March 2022, as risk aversion selloff continued amid concerns over disruptions to business operations and the toll on economic growth after China's financial hub of Shanghai on Tuesday tightened the first phase of a two-stage COVID-19 lockdown.

However, market losses capped amid expectations that authorities could announce moves to support growth after reports that the central bank could reduce bank reserve requirements to support credit expansion and prop up economic growth.

At close of trade, the benchmark Shanghai Composite Index fell 0.33%, or 10.56 points, to 3,203.94. The Shenzhen Composite Index, which tracks stocks on China's second exchange, fell 0.57%, or 12.03 points, to 2,084.47. The blue-chip CSI300 index sank 0.35%, or 14.33 points, to 4,134.14.

 

Investors are cautious about economic growth pressure from the further spread of Covid resurgence and the strict measures that could follow to contain the virus. Shanghai, China's financial centre, tightened the first phase of a two-stage COVID-19 lockdown on Tuesday, asking some residents to stay indoors unless they are getting tested as the number of daily cases rose beyond 4,400.

CURRENCY NEWS: China's yuan was up against the U.S. dollar after firmer mid-point fixing by central bank. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.364 per dollar, 92 pips firmer than the previous fix 6.3732. In the spot market, the yuan CNY=CFXS was trading at 6.3699 at midday, 21 pips firmer than the previous late session close.

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