At closing bell, the benchmark Shanghai Composite Index was down 0.16%, or 5.57 points, to 3,441.28. The Shenzhen Composite Index, which tracks stocks on China's second exchange, fell 0.97%, or 22.35 points, to 2,276.58. The blue-chip CSI300 index dropped 1.22%, or 62.36 points, to 5,061.13. China's financial markets closed from Monday to Wednesday for the Labor Day holidays.
China has decided to suspend all its activities under the Strategic Economic Dialogue with Australia, a move that is likely to exacerbate the tense diplomatic relations between the two countries. This decision comes a few weeks after Australia scraped the controversial Belt and Road (BRI) agreement with China citing the deal as against its national interest. Last month, Australian Foreign Minister Marise Payne said that the BRI deal has been canceled under the Commonwealth's new foreign veto laws. The cancellation could also mean an end to further Sino-Australian cooperation in the fields of industrial production, biotechnology and agriculture. Meanwhile, China had said that Australia's decision to cancel agreements between Beijing's flagship Belt and Road Initiative and the state of Victoria was among several "negative moves" that had hurt bilateral relations.
Shares of Chinese vaccine producers and distributors sank after news that the U.S. will support a proposal to waive intellectual-property protections for Covid-19 vaccines. The Biden administration backed a proposal to waive patent and other intellectual property protections for Covid-19 vaccines, and urged other nations to do so in a move to help fight the global pandemic.
Tourism stocks also fell despite the increased number of travelers over the break from a year earlier. Songcheng Performance Development Co. closed 5.4% lower, while China Tourism Group Duty Free Corp. lost 5.2%.
CURRENCY NEWS: China yuan eased against the dollar on Thursday, inline with softer mid-point fixing by central bank. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.4895 per dollar, 223 pips or 0.34% weaker than the previous fix last Friday of 6.4672. In the spot market, onshore yuan CNY=CFXS opened at 6.4800 per dollar and eased to a low of 6.4846 at one point, before closing at 6.4797, softer by 52 pips than last Friday close.
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