China Market rebounds 4.1%

The Mainland China equity market finished session sharply higher on Monday, 22 October 2018, as investor chased for bottom fishing on recently battered shares after policy makers committed to boosting support measures for a slowing economy and struggling companies. The market was also encouraged by news that China is preparing to overhaul its income tax law for individuals. At closing bell, the benchmark Shanghai Composite Index surged 4.1%, or 104.41 points, to 2,654.88, meanwhile the Shenzhen Composite Index, which tracks stocks on China's second exchange, rose 4.9%, or 61.92 points, to 1,325.73. The blue-chip CSI300 index climbed up 4.3%, or 135.32 points, to 3,270.27.

The market extended a rally that started on Friday, in the wake of coordinated statements of support for plunging equity markets by senior regulators, and as the nation prepares to overhaul its income tax law for individuals.

 

Chinese Vice Premier Liu He, who oversees the economy and financial sector, joined the heads of the China Securities Regulatory Commission, the China Banking and Insurance Regulatory Commission, and the People's Bank of China in coordinated statements to rally investor confidence amid a bruising market slump.

Over the weekend, President Xi Jinping vowed unwavering support for non-state firms, while the country's stock exchanges committed to help manage share-pledge risks. China's government on Saturday published its widely-expected plan to cut personal income taxes after data showed the nation's economy grew at the slowest pace since 2009.

CURRENCY NEWS: China's yuan was little changed against the U.S. dollar on Monday after stronger soft mid-point fixing by central bank and after coordinated statements of support by senior regulators. Prior to market open, the People's Bank of China set the midpoint rate at 6.9236 per dollar, 151 basis points stronger than the previous day's fix of 6.9387. The onshore spot yuan was changing hands at 6.9318, softer by 28 pips than the previous late session close. The offshore yuan was trading at 6.9322 per dollar.

OFFSHORE MARKET: US stock market closed mixed on Friday, as concerns about rising interest rates and tensions between the U.S. and Saudi Arabia continued to weigh on the markets. The Dow Jones Industrial Average rose 64.89 points or 0.3% to 25,444.34, while the Nasdaq fell 36.11 points or 0.5% to 7,449.03 and the S&P 500 edged down 1.00 points to 2.767.78.

European markets also ended mixed on Friday. The German DAX Index dipped by 0.3% and the French CAC 40 Index fell by 0.6%, while the U.K.'s FTSE 100 Index rose by 0.3%.

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