China: Stocks fall amid Mideast tensions

Mainland China equity market finished session lower on Wednesday, 08 January 2020, as risk aversion prevailed on reports that Iran launched missiles against a U.S. air base in Iraq after the American killing of a top Iranian general. Around late afternoon, the benchmark Shanghai Composite Index declined 0.57%, or 17.67 points, to 3,087.13. The Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 0.11%, or 2.02 points, to 1,789.83. The blue-chip CSI300 index was down 0.5%, or 20 points, to 4,140.23.

Investors were concerned about heightened tensions in Middle East after Iran fired missiles at Iraqi bases that host U.S. troops. The attacks followed the U.S. killing of Iran's top military commander in Baghdad, Gen. Qasem Soleimani last Friday and triggered concerns of a broader conflict in the region.

 

Meantime, investors continue to weigh developments on the trade front with the first phase of the U.S.-China trade deal expected by many to be signed on Jan. 15.

CURRENCY NEWS: China's central bank lifted its official yuan midpoint to the highest in five months on Wednesday to reflect strong gains in the spot yuan in the previous session. The People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.9450 per dollar prior to the market open, 240 pips or 0.35% firmer than the previous fix of 6.9690 and the strongest since Aug. 5, 2019. China's onshore spot yuan CNY=CFXS rallied on Tuesday, supported by corporate dollar selling.

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