China Stocks rise on stimulus hopes

Headline indices of the Mainland China equity market advanced on Wednesday, 22 April 2020, after recouping early losses, as investors expecting China to roll out a massive stimulus package soon to cushion economic slowdown resulting from the coronavirus pandemic. However, market gains caped, as a rout in crude oil prices underscored fears of severe economic fallout from the coronavirus crisis. Around late afternoon, the benchmark Shanghai Composite Index advanced 0.4%, or 11.52 points, to 2,838.53. The Shenzhen Composite Index, which tracks stocks on China's second exchange, increased by 0.75%, or 13.10 points, to 1,766.52. The blue-chip CSI300 index rose 0.61%, or 23.11 points, to 3,831.16.

Market gains propelled on hopes that China to roll out a massive stimulus package soon to cushion economic slowdown resulting from the coronavirus pandemic.

 

Market gains were capped as fears that the COVID-19 pandemic wrecks the world economy. Concerns about oil storage availability amid weaker demand for the commodity and a week long dispute between Russia and OPEC nations, have propelled the historic oil sell-off. OPEC and Russia eventually agreed to cut production by 10 million barrels per day in May.

Oil prices remained volatile in overnight trade. West Texas Intermediate's contract for May delivery -- which traded below $0 on Monday for the first time in history -- rebounded slightly Tuesday but was trading at less than $5. For June delivery, which experts view as a better indicator of how Wall Street views oil prices, WTI fell 43.4% to $11.57 per barrel on Tuesday. The crude price rout extended to global benchmark Brent with the contract for June deliveries closed at $19.33.

In the Asian trading hours on Wednesday, he June contract for West Texas Intermediate (WTI) clawed back some Tuesday losses as it jumped 11.32% to $12.88 per barrel, after falling more than 40% on Tuesday. Meanwhile, international Brent crude futures fell 2.43% to $18.86 per barrel, having plunged from levels above $24 per barrel on Tuesday.

CURRENCY NEWS: China's yuan was softer against the dollar on Wednesday, as China central bank fixed softer mid-point rate. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 7.0903 per dollar, 151 pips or 0.2% weaker than the previous fix of 7.0752, the weakest since April 7. In the spot market, the onshore yuan CNY=CFXS opened at 7.0850 per dollar and was changing hands at 7.0852 by midday, 73 pips weaker than the previous late session close,

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