China Market extends gain on stimulus hopes

Mainland China equity market finished session sharp higher Tuesday, 03 March 2020, as investors continued bargain hunting on reduction in new cornavirus cases in the country and on hopes of global policy action to shield economic growth from the impact of the coronavirus epidemic. At closing bell, the benchmark Shanghai Composite Index advanced 0.74%, or 21.97 points, to 2,992.90. The Shenzhen Composite Index, which tracks stocks on China's second exchange, was up 1.03%, or 19.27 points, to 1,888.92. The blue-chip CSI300 index advanced 0.53%, or 21.70 points, to 4,091.36.

Mainland China reported 125 new cases of coronavirus infections as of Monday, down from 202 cases a day earlier. However, cases outside China continued to rise, posing a greater risk to the global economy.

 

Traders were awaiting talks between central bankers and other financial leaders of the Group of Seven industrial nations on how to tackle the slowdown brought on by the coronavirus outbreak that began in China and has spread to dozens of countries, killing about 3,100 people and sickening more than 90,000.

U.S. Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell will lead the call Tuesday. The group includes Japan, Germany, Britain and France, among others. The G-7 often issues statements pledging cooperation amid global economic turbulence.

The International Monetary Fund and World Bank announced simultaneously Monday that they are ready to help countries affected by the coronavirus through their emergency lending programs and other tools.

The heads of ECB and Bank of Japan issued emergency statements on Monday that echoed one from Fed Chair Jerome Powell late last week, with all three looking set to take steps to limit economic damage from the virus.

Nearly 300 million people have resumed work in China since the Lunar New Year break as more firms restart business and travel restrictions ease, although many small firms are still struggling to find enough workers to run plants. In China, policymakers have already implemented a raft of measures to support the economy as the epidemic is expected to have a devastating impact on first-quarter growth.

CURRENCY NEWS: China's yuan edged up against the dollar, after firmer mid-point fixing by central bank. Prior to the market opening, the People's Bank of China (PBOC) set the midpoint CNY=PBOC at 6.9516 per dollar, firmer than the previous fix of 6.9811, and the strongest since Feb. 3. In the spot market, the onshore yuan CNY=CFXS opened at 6.9600 per dollar and was changing hands at 6.9708.

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