China Stocks rebound on recovery hopes

19 May 2022 , 04:44 PM

The Mainland China market finished session slightly higher on Thursday, 19 May 2022, as investors chased for bottom fishing on hopes for economic recovery amid signs of easing COVID-19 restrictions, with buying boosted by inflows from foreign investors. However, market gains capped after some major global investment banks cut their expectations for Chinas economic growth. Concerns of a potential repeat of Shanghai-like lockdowns in other major Chinese cities also dampened sentiments. At close of trade, the benchmark Shanghai Composite Index advanced 0.36%, or 10.99 points, to 3,096.97. The Shenzhen Composite Index, which tracks stocks on Chinas second exchange, added 0.58%, or 11.17 points, to 1,952.71. The blue-chip CSI300 index grew 0.19%, or 7.69 points, to 3,999.60. Foreign investors were net buyers of A-shares, with Refinitiv data showing inflows of more than 8.5 billion yuan ($1.26 billion) through Stock Connect. On Thursday, deputy mayor Zhang Wei told a news conference that Shanghai will start to allow more businesses in zero-COVID areas to resume normal operations from the start of June, as the city prepares for the end of lockdown. Separately, Premier Li Keqiang was quoted by state media that China has policy room to cope with challenges, as the downward pressure on the economy increases. Standard Chartered became the latest financial institution to cut its 2022 growth forecast for China, lowering it to 4.1% from 5% to reflect an economic contraction in April due to COVID-19 disruptions. Goldman Sachs lowered China 2022 growth forecast to 4% from 4.5% a day earlier, also citing COVID-related damage to the economy in the second quarter. CURRENCY NEWS: Chinas yuan eased against the dollar on Thursday after softer mid point fixing by central bank. Prior to the market opening, the Peoples Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.7524 per dollar, weaker than the previous fix of 6.7421. In the spot market, the onshore yuan CNY=CFXS opened at 6.7648 per dollar and was changing hands at 6.7597 at midday, 67 pips or 0.1% weaker than the previous late session close.Powered by Capital Market – Live News