China Stocks end mixed after manufacturing and service PMI data

The Mainland China share market closed mixed on Monday, 01 November 2021, as investors risk sentiments turned subdued after fresh batch of economic data painted a mixed picture of domestic manufacturing and service activity. Also weighing down sentiments was fears of tighter travel restrictions in coming weeks ahead of the upcoming Spring Festival travel rush after recent COVID-19 outbreaks in the country.

At closing bell, the benchmark Shanghai Composite Index declined marginal 0.08%, or 2.86 points, to 3,544.48. The Shenzhen Composite Index, which tracks stocks on China's second exchange, gained 0.49%, or 11.75 points, to 2,411.78. The blue-chip CSI300 index fell 0.37%, or 18.09 points, to 4,890.68.

 

China's official manufacturing Purchasing Managers' Index for October came in at 49.2 over the weekend, below the 50 level separating expansion from contraction. It represented the second straight month of shrinking manufacturing activity in the country, following September's official manufacturing PMI reading of 49.6. However, a private survey released Monday showed Chinese manufacturing activity growth in October expanding with the Caixin/Markit manufacturing PMI coming in at 50.6.

Activity in China's services sector grew at a slower pace in October as the country combats small-scale COVID-19 outbreaks hitting mainly the north. The non-manufacturing PMI could drop much further in November, as Beijing may significantly tighten travel restrictions in coming weeks, in order to contain the current wave ahead of the upcoming Spring Festival travel rush.

Shares of realty firms declined, as a recent planned pilot real-estate tax scheme dented risk appetite in the sector.

Shares of defense related companies advanced as tensions around Taiwan issues intensified. U.S. Secretary of State Antony Blinken and Chinese Foreign Minister Wang Yi locked horns over Taiwan on the sidelines of a Group of 20 summit on Sunday, trading warnings against moves that could further escalate tensions across the Taiwan Strait.

CURRENCY NEWS: China's yuan was little changed against the U.S. dollar on Monday as softer mid-point fixing by central bank and ahead of the U.S. Federal Reserve's policy meeting.. Prior to the market opening, the People's Bank of China (PBOC) set the midpoint CNY=PBOC at 6.4192 per dollar, 285 pips or 0.44% weaker than the previous fix of 6.3907. In the spot market, onshore yuan CNY=CFXS was changing hands at 6.4043 at midday, 3 pips firmer than the previous late session close.

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