Adding to investor pessimism, recent economic indicators showed no signs of improving, and the International Monetary Fund on Friday projected that China's economic growth would slow to 4.6% in 2024 and decline further in the medium-term with growth of about 3.5% projected in 2028.
At close of trade, the benchmark Shanghai Composite index stumbled 1.02%, or 27.97 points, to 2,702.19. The Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 3.93%, or 58.60 points, to 1,433.10. The blue-chip CSI300 index added 0.65%, or 20.79 points, to 3,200.42.
ECONOMIC NEWS: China Caixin Services Eases To 52.7 In January- The services sector in China continued to expand in January, albeit at a slightly slower pace, the latest survey from Caixin revealed on Monday with a services PMI score of 52.7. That's down from 52.9 in December, although it remains above the boom-or-bust line of 50 that separates expansion from contraction. Chinese service providers registered a further increase in overall new business at the start of 2024, thereby stretching the current period of expansion to just over a year. According to panel members, firmer underlying demand conditions and new customer wins had supported the latest upturn in sales. However, the rate of growth eased notably from December's seven-month record and was only modest. New export business likewise rose at a moderate pace, with the rate of growth easing only fractionally from the previous month. Chinese service sector employment rose for the second straight month in January, with firms often linking the increase to efforts to expand capacity amid higher sales. That said, the rate of job creation remained marginal overall, as some firms took a more cautious approach to hiring.
CURRENCY NEWS: China's yuan was tad softer against the dollar on Monday, as softer mid-point fixing by the central bank. Prior to the market's opening, the People's Bank of China set the midpoint rate at 7.107 per U.S. dollar, 1 pips softer than the previous fix of 7.1006. In the spot market, the onshore yuan CNY=CFXS yuan was changing hands at 7.1974 at midday, 34 pips weaker than the previous late session close.
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