The Mainland China market finished session higher on Wednesday, 25 May 2022, on hopes that growth will likely strengthen in the second half of 2022 in response to stimulus measures that China has introduced into the economy.At close of trade, the benchmark Shanghai Composite Index added 1.19%, or 36.54 points, to 3,107.46. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 1.17%, or 22.40 points, to 1,944.88. The blue-chip CSI300 index grew 0.61%, or 24.03 points, to 3,983.18.
China's financial regulators pledged to keep credit growth stable in the property sector and help homebuyers affected by virus outbreaks to defer mortgage payments, and the central bank said it would use various tools to appropriately increase credit and support economic growth. China's central bank and banking regulator urged lenders to boost loans in the latest effort to shore up the battered economy.
However, market gains were capped by worries over slowing growth in the COVID-hit economy. UBS joined other global investment banks, including Goldman Sachs and Standard Chartered, in lowering its 2022 China growth outlook, slashing its full-year GDP forecast to 3% from 4.2% previously, as COVID-19 outbreaks and stringent anti-virus measures take a toll on China. That marks a huge discrepancy from the official target of around 5.5% for 2022. The capital Beijing further tightened its dragnet on the virus with zero community transmission the target. Nationwide, China reported 590 new coronavirus cases for Tuesday, down from 688 new cases a day earlier.
CURRENCY NEWS: China's yuan weakened against the U.S. dollar on Wednesday, despite firmer mid-point fixing by central bank. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.655 per dollar, 0.02% firmer than the previous fix 6.6566. Onshore spot yuan CNY=CFXS opened at 6.6600 per dollar and eased to 6.6668 by midday, 128 pips or 0.2% softer than Tuesday's late session close.
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