China Market falls on profit booking

The Mainland China equity market closed lower on Tuesday, 29 October 2019, as traders bagged profits from a big run-up earlier in blockchain-related and other shares after Chinese state media urged investors to remain rational and not equate Beijing's support for blockchain as a boost for virtual currencies. At closing bell, the benchmark Shanghai Composite Index declined 0.87%, or 25.87 points, to 2,954.18. The Shenzhen Composite Index, which tracks stocks on China's second exchange, lost 0.94%, or 15.56 points, to 1,642.68. The blue-chip CSI300 index dropped 0.42%, or 16.36 points, to 3,910.23.

Shares of blockchain- or digital-currency-related businesses declined on profit-taking as Chinese state media on Tuesday urged investors to remain rational and not equate Beijing's support for blockchain as a boost for virtual currencies, after comments by Chinese President Xi Jinping drove up shares in blockchain-related firms and the price of bitcoin. China Greatwall Technology Group which had risen by the daily 10% limit on Monday amid investor excitement over companies engaged in, or thought to be engaged in, blockchain- or digital-currency-related businesses, dropped 6.6%.

Gree Electric Appliances, China's largest air-conditioner maker, jumped 4.4% to 59.39 yuan after its state-owned parent agreed to sell a 15% stake to a private equity fund backed by Hillhouse Capital.

CURRENCY NEWS: China's yuan strengthened against greenback on Tuesday, after the central bank firmer mid-point fixing and on the latest signs of progress in the Sino-U.S. trade negotiations. Prior to market opening on Tuesday, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 7.0617 per dollar, 145 bps or 0.2% firmer than the previous fix of 7.0762. In the spot market, onshore yuan CNY=CFXS opened at 7.0600 per dollar and was changing hands at 7.0597 at midday, 75 bps firmer than the previous late session close.

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