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Budget News

  • China Stocks rise on stimulus hopes
  • May 29,2020  20:01
  • The Mainland China share market finished session higher on Friday, 29 May 2020, on expectations of stimulus measures to underpin the world's second-largest economy after China pledges largest-ever economic rescue package to save jobs and livelihoods amid coronavirus. However, market gains capped amid fresh standoff between the world's two largest economies over Hong Kong's special status. At closing bell, the benchmark Shanghai Composite Index added 0.22%, or 6.13 points, to 2,852.35. The Shenzhen Composite Index, which tracks stocks on China's second exchange, rose 0.95%, or 16.81 points, to 1,786.51. The blue-chip CSI300 index rose 0.27%, or 10.39 points, to 3,867.02.

    China has pledged a package of 4 trillion yuan (US$559 billion) worth of cost cuts for the country's struggling factories and merchants in 2020, the largest economic rescue plan in its history, in an enhanced effort to save jobs that were put at risk by the coronavirus outbreak, Premier Li Keqiang confirmed on Thursday.

    The combined cuts in business costs, which include tax exemptions, lower bank interest rates and waived contributions to social welfare funds as well as reduced prices for utilities such as electricity, will be carried out on top of 2 trillion yuan in additional fiscal spending and government bond issuances.

    China approved a controversial national security law for Hong Kong on Thursday, triggering concerns that the new law will end the city's autonomy. In response, U.S. President Donald Trump said he plans to hold a news conference about China later today. The move came after Washington revoked the special status conferred on Hong Kong, paving the way for the territory to be stripped of trading and economic privileges.US Secretary of State Mike Pompeo said the status had been withdrawn because China was no longer honouring its handover agreement with Britain to allow Hong Kong a high level of autonomy.

    CURRENCY NEWS: The yuan eased against the dollar on Friday, inline with soft mid-point fixing by central banks as investors braced for U.S. President Donald Trump's response to China as it pushed ahead with national security legislation for Hong Kong. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 7.1316 per dollar, weaker than the previous fix of 7.1277. In the spot market, onshore yuan CNY=CFXS opened at 7.1575 per dollar and was changing hands at 7.1503 at midday, 56 pips weaker than the previous late session close.

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