China Stocks fall on fresh virus concerns

The Mainland China share market finished session lower on Monday, 15 June 2020, as worried about a second wave of COVID-19 infections that could further damage the economy after an outbreak at a Beijing market and a rise in cases globally. Meanwhile, underwhelming domestic economic data also weighed on investor sentiment.

At closing bell, the benchmark Shanghai Composite Index declined 1.02%, or 29.71 points, to 2,890.03. The Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 0.29%, or 5.36 points, to 1,865.34. The blue-chip CSI300 index fell 1.2%, or 48.09 points, to 3,954.99.

Investors chose to play safe at the start of the week on renewed concerns over a second wave of infections as clusters of new infections were reported in the US and China. Beijing on Monday reported its second consecutive day of record numbers of COVID-19 cases, while new cases and hospitalisations in record numbers swept through more U.S. states.

 

Meanwhile, underwhelming domestic economic data also weighed on investor sentiment. China's industrial output rose 4.4% in May from a year ago, less than expected, while retail sales fell a larger-than-expected 2.8% in a sign of weak domestic demand. Fixed asset investment dropped by more than 6 per cent in the first five months of the year, but rose over the month.

CURRENCY NEWS: The yuan weakened against the dollar on Monday, inline with soft mid-point fixing by central bank and fears that the emergence of a new coronanvirus cluster in Beijing could be the start of a second wave of infection. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 7.0902 per dollar, 37 pips or 0.05% weaker than the previous fix of 7.0865. In the spot market, the spot yuan was changing hands at 7.0870, 11 pips weaker than the previous late session close.

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