China Market gains on COVID restriction relaxation hopes

2 Nov 2022 , 05:02 PM

Mainland China share market finished volatile session notably higher on Wednesday, 02 November 2022, extending yesterdays rally, on unverified talks suggesting that policymakers are preparing to gradually exit the stringent COVID Zero policy. Also, boosting market sentiments was Chinas central bank governor statement that the yuan will remain stable against a basket of currencies and that the country would be able to maintain normal monetary policy and positive interest rates as long as possible. At close of trade, the benchmark Shanghai Composite Index advanced 1.15%, or 34.17 points, to 3,003.37. The Shenzhen Composite Index, which tracks stocks on Chinas second exchange, added 1.33%, or 25.85 points, to 1,968.20. The blue-chip CSI300 index increased 1.2%, or 43.64 points, to 3,677.81. The rebound in the Mainland China market have been stoked by hope that Xi will relent on Covid Zero to rescue the ailing economy after he solidified his grip on power at last months Party Congress. Beijings stringent Covid restrictions have been the biggest concern for investors, making the market sensitive to the slightest signs of a change in the policy. Covid curbs and lockdowns have made China stock measures some of the worlds worst performers this year. CURRENCY NEWS: Chinas yuan was firmer against the dollar on Wednesday, despite weaker midpoint fixing by Chinas central bank, reflecting broad dollar weakness in global markets ahead of a Federal Reserve rate decision later in the day that should also give clues on its future policy path. Prior to the market opening, the Peoples Bank of China (PBOC) set the midpoint rate CNY=PBOC at 7.2197 per dollar, 116 pips or 0.16% weaker than the previous fix 7.2081. In the spot market, the onshore yuan CNY=CFXS opened at 7.2839 per dollar and was changing hands at 7.2720 at midday, 90 pips stronger than the previous late session close. Powered by Capital Market – Live News