China Market falls after industrial profit growth slows

The China share market finished session slight lower on Tuesday, 27 October 2020, as risk sentiments dampened after official data showed profits at China's industrial firms rose for a fifth straight month in September, but at a slower pace as factory-gate deflation and rising raw materials costs undercut a recovery in the manufacturing sector.

The weakness in domestic market followed Wall Street sharp fall overnight as anxiety grew over new record daily COVID-19 cases in the United States and part of Europe and uncertainty about a U.S. coronavirus relief package

At closing bell, the benchmark Shanghai Composite Index declined 0.61%, or 19.80 points, to 3,234.82. The Shenzhen Composite Index, which tracks stocks on China's second exchange, sank 2.14%, or 46.53 points, to 2,129.25. The blue-chip CSI300 index dropped 0.06%, or 2.61 points, to 4,581.98.

 

Profits at Chinese industrial firms in September rose 10.1 per cent year-on-year to 646.43 billion yuan ($96.34 billion), National Bureau of Statistics (NBS) data showed on Tuesday. That marked the fifth month of profit growth, albeit slower than a 19.1 per cent increase in August. For January-September, industrial firms' profits fell 2.4 per cent on an annual basis to 4.37 trillion yuan, with the downturn easing from a 4.4 per cent decrease in the first eight months.

CURRENCY NEWS: China's yuan firmed on Tuesday, but traded in a narrow range as market participants tread cautiously ahead of the U.S. election. Prior to the market open, the People's Bank of China set the midpoint rate CNY=PBOC at 6.6989 per dollar, the weakest since Oct. 19, and 264 pips softer than the previous fix of 6.6725. The spot market CNY=CFXS opened at 6.7040 per dollar and was changing hands at 6.7035 at midday, 83 pips firmer than the previous late session close.

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