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China Market gains on stimulus measures

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Capital Market
Last Updated : Jun 02 2022 | 6:16 PM IST
The Mainland China market finished session modest higher on Thursday, 02 June 2022, as economic growth optimism after China's cabinet announced detailed measures to support infrastructure construction and counter economic slowdown. However, market gains capped as investor concerns over Beijing's zero-COVID policy and a potential rebound in cases.

At close of trade, the benchmark Shanghai Composite Index increased by 0.42%, or 13.30 points, to 3,195.46. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 0.69%, or 13.86 points, to 2,026.51. The blue-chip CSI300 index grew 0.16%, or 6.39 points, to 4,089.57.

China's cabinet has announced a package of 33 measures covering fiscal, financial, investment and industrial policies to revive its pandemic-ravaged economy. China's cabinet said on Wednesday that it will increase the credit quota for policy banks by 800 billion yuan ($120 billion) to enable them to support infrastructure construction.

Premier Li Keqiang has vowed to achieve positive economic growth in the second quarter. Zou Lan, head of the PBOC's monetary policy department, told the briefing that the credit quota for policy banks will help improve their ability to finance infrastructure projects.

China's central bank will strengthen the implementation of its prudent monetary policy and bring forward steps to support the economy, vice governor Pan Gonsheng said on Thursday. The People's Bank of China (PBOC) will use various policy tools to step up liquidity injections to keep liquidity in the economy reasonably ample, Pan told.

CURRENCY NEWS: China's yuan softened against the U.S. dollar on Thursday, as weaker mid-point fixing by central bank. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.7095 per dollar, 444 pips or 0.7% weaker than the previous fix at 6.6651. Spot market CNY=CFXS opened at 6.6900 per dollar and was changing hands at 6.6984, 126 pips softer than the previous late session close.

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First Published: Jun 02 2022 | 6:05 PM IST

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