China Stocks trade mixed

Headline indices of the Mainland China equity market were mixed on Monday, 23 July 2018, as investors appeared to shrug off the weak cues from Wall Street Friday after U.S. President Donald Trump criticized the Federal Reserve's monetary policy and worries about global trade wars after US President Donald Trump accused China and the European Union of manipulating their currencies and interest rates lower. Market gains led by banking and industry sectors, but a slump in healthcare shares amid a vaccine scandal capped the gains. Around late afternoon, the benchmark Shanghai Composite Index rose 0.64%, or 18.23 points, to 2,847.50, meanwhile the Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 0.22% or 3.56 points, to 1,589.74. The blue-chip CSI300 index rose 0.4%, or 14.30 points, to 3,507.19.

President Donald Trump on Friday said China and the European Union were manipulating their currencies and interest rates lower, and repeated a threat to slap China with $500 billion worth of tariffs on import of their products into the US, as a trade dispute between the world's two biggest economies intensified with no signs a resolution was near at hand. Mr Trump's more aggressive protectionists policies have sparked retaliatory measures from countries around the world, rattling financial markets worried about the impact on global growth.

 

Shares of major healthcare firms slumped, dragged by 10% drop for Chongqing Zhifei Biological Products, hit by a selloff in biotech stocks amid the scandal that erupted a week ago, after a major vaccine maker was found to have violated standards in making rabies vaccine for humans. Chinese Premier Li Keqiang has called for an immediate investigation into the scandal over faulty vaccines that he said had crossed a moral line, and urged severe punishment for the companies and people implicated.

Shares of financial players climbed up after China released draft rules and guidelines to strengthen regulations of financial institutions' wealth management and asset management businesses. The China Banking and Insurance Regulatory Commission (CBIRC) released long-awaited draft rules on commercial banks' wealth management products (WMPs), saying that these WMPs should be managed based on their net value. The new draft rules eased the concern and will bode well for banking firms.

CURRENCY NEWS: Chinese yuan appreciated against greenback on Monday after strong mid-point fixing by central bank. The central parity rate of the Chinese currency renminbi, or the yuan, strengthened 78 basis points to 6.7593 against the U.S. dollar Monday, according to the China Foreign Exchange Trade System.

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