China Market extends losses

Mainland China equity market finished first session of the new month and second quarter of the year firmly lower on Wednesday, 01 April 2020, after inheriting a weak lead for Wall Street overnight, amid lingering concerns about the global economic impact of the coronavirus pandemic. However, market losses were capped by hopes Beijing would unveil more measures to bolster the economy hit by the coronavirus pandemic. At closing bell, the benchmark Shanghai Composite Index declined 0.57%, or 15.77 points, to 2,734.52. The Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 0.35%, or 5.85 points, to 1,660.08. The blue-chip CSI300 index declined 0.3%, or 11.08 points, to 3,675.08.

Risk aversion selloff triggered amidst deepening concerns about the economic impact of the coronavirus. Investors expected more stimulus measures to combat the impact of the global coronavirus pandemic

China's factory activity improved in March after plunging a month earlier, a private survey showed on Wednesday, but the bare minimal growth highlighted the intense pressure facing businesses as the global coronavirus pandemic shuts down many countries.

ECONOMIC NEWS: China Manufacturing PMI Rises In March- Chinese manufacturing Purchasing Managers' Index rose to 50.1 in March from 40.3 in February, according to the survey conducted by IHS Markit. Manufacturers reported a broadly stable business condition in March after deteriorating the most on record in February due to the strict measures taken to stem the spread of coronavirus, or covid-19. The manufacturing sector returned strongly to expansion territory in March. The factory PMI jumped to 52.0 from 35.7 in February. After widespread company closures and travel restrictions led to a record decline in production in February, an easing of some measures led to a tentative rise in output at the end of the first quarter. Nonetheless, new orders remained fragile as firms either delayed or cancelled orders due to the ongoing pandemic. New export orders fell sharply as global economies grapple with containing the spread of the virus.

CURRENCY NEWS: China's yuan was lower against the dollar, in spite of China central bank fixed firmer mid-point rate, as investors favoured the safe haven dollar with the world economy facing a one of the worst contractions in decades due to the coronavirus pandemic. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 7.0771 per dollar, 80 pips or 0.11% firmer than the previous fix of 7.0851. In the spot market, onshore yuan CNY=CFXS opened at 7.0810 per dollar and was changing hands at 7.0879 at midday, 69 pips weaker than previous late session close.

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