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China Stocks fall on crackdown woes

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Capital Market
Last Updated : Aug 20 2021 | 8:50 PM IST
The Mainland China share market finished session steep down on Friday, 20 August 2021, as risk aversion selloff continued amid regulatory uncertainty surrounding the technology sector after China's National People's Congress officially passed a law designed to protect online user data privacy.

At closing bell, the benchmark Shanghai Composite Index was down 1.1%, or 38.22 points, to 3,427.33. The Shenzhen Composite Index, which tracks stocks on China's second exchange, declined 1.17%, or 28.27 points, to 2,388.96. The blue-chip CSI300 index dropped 1.91%, or 92.87 points, to 4,769.27.

The once high-flying Chinese technology firms have been hit hard as investors flee Beijing's regulatory crackdown. Traders were uncertain about how far Beijing's crackdown will go, which has propelled analysts to downgrade the prices of stocks in anticipation of more regulatory action.

Going beyond the initial antitrust policy tightening against technology giants, the government has swiftly moved to reduce the burden of schoolchildren and parents by cracking down on the education technology segment. It has also moved to protect the rights of workers such as those in the food delivery sector. On Friday, health care technology firms joined the downward trend after People's Daily said that the methods of diagnoses, prescriptions and use of medicine on health care technology platforms needed to be improved to ensure safety.

CURRENCY NEWS: China yuan was down against the dollar on Friday, inline with soft mid-point fixing by central bank and broad dollar strength amid growing risk aversion in global markets. Prior to the market opening, the People's Bank of China (PBOC) set the midpoint CNY=PBOC at 6.4984 yuan per dollar, 131 pips or 0.2% softer than the previous fix of 6.4853. In the spot market, the onshore yuan CNY=CFXS opened at 6.4950 per dollar and quickly weakened past the psychologically important 6.5 per dollar level before changing hands at 6.5014 at midday, 67 pips softer than the previous late session close.

The People's Bank of China left its benchmark lending rate for corporate and household loans unchanged for a 16th straight month

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First Published: Aug 20 2021 | 5:29 PM IST

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