China Market rises on stimulus hopes

Mainland China equity market finished session higher on Wednesday, 05 February 2020, as investors risk sentiments underpinned on hopes of additional stimulus measures to mitigate the impact of a fast-spreading coronavirus outbreak. At closing bell, the benchmark Shanghai Composite Index added 1.25%, or 34.80 points, to 2,818.09. The Shenzhen Composite Index, which tracks stocks on China's second exchange, rose 2.48%, or 40.62 points, to 1,678.64. The blue-chip CSI300 index was up 1.13%, or 42.89 points, to 3,828.53.

Investors appear to be taking some comfort from the measures Beijing is introducing to support economic growth, even as travel restrictions continue in China and business shut-downs mount. Investor appetite was whetted by hopes that China's central bank to lower its key lending rate on Feb. 20, and cut banks' reserve requirement ratios in the coming weeks. It has already pumped hundreds of billions of dollars into the financial system this week to keep rates from rising and restore confidence in the wake of the outbreak. However, market gains capped amid persistent fears over the unabated coronavirus epidemic.

 

CURRENCY NEWS: China's yuan surged past 6.98 per dollar and reversed intraday losses on Wednesday afternoon on reports that a Chinese university had found a drug to treat people with the new coronavirus. The offshore yuan strengthened 0.2%. The onshore yuan also firmed after it finished domestic trading.

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