Mainland China share market finished session higher on Tuesday, 21 March 2023, as risk sentiments underpinned on sign of improvement in Chinese economic activity in the first two months of 2023, calming fears of global banking contagion, and expectation that the People's Bank of China to maintain an easing stance.
At close of trade, the benchmark Shanghai Composite Index was up 0.64%, or 20.74 points, to 3,255.65. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 1.57%, or 32.33 points, to 2,085.98. The blue-chip CSI300 index advanced 1.1%, or 43.30 points, to 3,982.38.
Manufacturing activity in China, the world's second-largest economy, expanded at the fastest pace in more than a decade in February as production increased after the lifting of Covid restrictions in December. Property prices in China have also stabilised with an increase in monthly home sales.
The Swiss government-backed UBS-Credit Suisse deal has helped ease some banking contagion fears. Regulators in the UK and Europe sought to restore confidence in the market on Monday after the UBS takeover of Credit Suisse wiped out some US$17 billion of capital instruments held by investors.
CURRENCY NEWS: China's yuan depreciated against the dollar on Tuesday, inline with softer mid-point fixing by China's central bank. Prior to market opening, the People's Bank of China set the midpoint rate CNY=PBOC at 6.8763 per dollar, weaker than the previous day fix of 6.8694. In the spot market, the yuan CNY=CFXS opened at 6.8799 per dollar and was changing hands at 6.8809 at midday, 24 pips weaker than the previous late session close and 0.07% away from the midpoint.
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