China Stocks fall on growth debt default woes

The Mainland China share market closed session steep lower on Tuesday, 02 November 2021, amid economic growth and property debt defaults worries. At close of trade, the benchmark Shanghai Composite Index declined 1.1%, or 38.85 points, to 3,505.63. The Shenzhen Composite Index, which tracks stocks on China's second exchange, decreased by 0.81%, or 19.51 points, to 2,392.27. The blue-chip CSI300 index fell 1.04%, or 50.84 points, to 4,839.85.

Mainland market suffered a risk aversion selloff across the board on growing concerns about the country's economic growth after fresh batch of economic data painted a mixed picture of domestic manufacturing and service activity.

 

Also weighing down sentiments was fears of spreading financial contagion after Central China Real Estate, Yango Group make last-ditch efforts to avoid bond defaults as Beijing piles on the pressure to ensure embattled home builders repay their debts on time.

Yango Group offered to exchange some U.S. dollar bonds for new notes personally guaranteed by its chairman to avoid defaulting on upcoming debt payments. Fitch Ratings downgraded the firm's rating "C" from "B," saying that it considered the offer a distressed debt exchange. Moody's Investors Service earlier cut Yango's corporate family rating to Caa2 from B2, citing liquidity risk.

CURRENCY NEWS: China's yuan was little softer against the U.S. dollar on Tuesday despite firmer mid-point fixing by central bank. Prior to the market opening, the People's Bank of China (PBOC) set the midpoint CNY=PBOC at 6.4009 per dollar, 0.29% firmer than the previous fix of 6.4192. In the spot market, onshore yuan CNY=CFXS was changing hands at 6.3988 late afternoon, 0.01% weaker than the previous late session close.

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