The Communist Party's Politburo, China's top policymaking body headed by President Xi Jinping, said on Wednesday it would stimulate market dynamic and facilitate the long-term healthy development of capital markets, as the economy is under growing downward pressure. The government has rolled out a flurry of policies since a week ago to aid the tumbling market weighed down by the escalating US-China trade war and a slowing economy. The Shanghai gauge has slumped more than 20% since the beginning of this year.
China should attach great importance to the current situation and be more proactive in taking measures to cope with the issues, China's official news agency reported, citing a meeting of the Politburo, chaired by President Xi Jinping. The meeting coincided on Wednesday with the release of disappointing manufacturing data, which saw expansion in the sector grow at its slowest rate in more than two years, missing economist forecasts. It also came on the heels of reports that the Trump administration is preparing to impose new tariffs on Chinese goods within the next several months.
Stocks related to artificial intelligence (AI) were up, after Xi voiced support for the industry in a separate Politburo meeting on Wednesday. A number of stocks surged to the 10% daily limit, including Shenzhen Sunwin Intelligent Co, an intelligent system solutions supplier, Beijing AriTime Intelligent Control Co, a manufacturer of industrial automation products, as well as Shenyang Yuanda Intellectual Industry Group
Securities brokages stocks also surged in the wake of a proposed tax legislation that caps securities trading tax unchanged at 1%. Guosen Securities climbed 8.4% to 9.08 yuan, Huatai Securities rose 5.7% to 17.59 yuan, and Nanjing Securities climbed 3.6% to 10.53 yuan.
ECONOMIC NEWS: The latest reading of Caixin Purchasing Managers' Index, a gauge tracking smaller private firms released on Thursday, edged up to 50.1 in October from 50 in September, showing little signs of improvement in China's manufacturing sector growth.
China's official manufacturing Purchasing Managers' Index (PMI)- produced by China's National Bureau of Statistics and the China Federation of Logistics and Purchasing (CFLP) - was stood at 50.2 for October, down from 50.8 in September, and slightly above the 50-point mark that separates growth from contraction, as factory activity in the world's second largest economy slowed amid the ongoing US-China trade war.
CURRENCY NEWS: China's yuan depreciated against the U.S. dollar on Thursday, after soft mid-point fixing by central bank. Prior to market open, the People's Bank of China set the midpoint rate at 6.967 per dollar, weakened by 24 basis points from 6.9646 mid-point set previous day. At 07:36 GMT, the yuan was quoted at 6.9496 per U.S. dollar, 0.35% firmer than the previous close of 6.974.
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