China Stocks falls after factory activity drops

31 Oct 2022 , 04:59 PM

Mainland China share market finished lower on Monday, 31 October 2022, on mounting concerns about Chinas economic growth prospect after official data showed that Chinas factory activity shrank in October as industries were hit by softening global demand and strict domestic COVID-19 curbs, which hit production, travel and shipping in the worlds second-largest economy. At close of trade, the benchmark Shanghai Composite Index fell 0.77%, or 22.44 points, to 2,893.48. The Shenzhen Composite Index, which tracks stocks on Chinas second exchange, added 0.38%, or 7.21 points, to 1,886.41. The blue-chip CSI300 index decreased 0.92%, or 32.63 points, to 3,508.70. The Purchasing Managers Index (PMI) — a key gauge of manufacturing in the worlds second-biggest economy — came in at 49.2, down from Septembers 50.1 and below the 50-point mark separating growth from contraction, according to data from the National Bureau of Statistics (NBS). The manufacturing PMI has been in contraction territory for six out of the past eight months, as sweeping COVID-19 restrictions paralyzed major industrial cities such as Shanghai, Shenzhen and Chengdu and a summer of searing heat hit production. Meanwhile the non-manufacturing PMI came in at 48.7 points in October, a sharp decline from 50.6 in September and ?below a critical point. Chinese leaders have set out an annual GDP growth of about 5.5%, but many economists think the country will struggle to hit the target, despite announcing a better-than-expected 3.9% expansion in the third quarter. CURRENCY NEWS: Chinas yuan weakened against the dollar on Monday after softer mid-point fixing by central bank. Prior to market opening, the Peoples Bank of China (PBOC) set the midpoint rate CNY=PBOC at 7.1768 per dollar, 70 pips weaker than the previous fix 7.1698, and the weakest since Feb. 14, 2008. In the spot market, the onshore yuan CNY=CFXS opened at 7.2560 per dollar and was changing hands at 7.2630 at midday, 130 pips softer than the previous late session close. Powered by Capital Market – Live News