China: Market falls 0.6%

Mainland China share market finished session notably lower on Monday, 25 July 2022, as COVID-19 cases in the country's commercial hub and uncertainty surrounding China's property sector continued to weigh on sentiment ahead of key policy meetings at home and abroad.

Selloff was also fueled after Goldman Sachs lowered its targets for Chinese stocks on earnings drag. Goldman Sachs reduced its 12-month target for MSCI China Index to 81 from 84, citing challenges from the latest cracks in the housing market and mortgage boycott against stalled projects.

At close of trade, the benchmark Shanghai Composite Index fell 0.6%, or 19.59 points, to 3,250.39. The Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 0.92%, or 20.06 points, to 2,165.36. The blue-chip CSI300 index was down 0.6%, or 25.59 points, to 4,212.64.

Investors remain jittery about possible broad disruptions to economic activity after Shanghai ordered residents across nine of the city's districts and some smaller areas to do COVID-19 tests during July 26-28, due to sporadic cases.

Also, a Politburo meeting this week is also in focus, where a top decision-making body will gather to discuss economic policies for the rest of the year.

CURRENCY NEWS: China's yuan declined against the U.S. dollar, as softer mid-point fixing by central bank. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.7543 per dollar, 21 pips weaker than the previous fix 6.7522. In the spot market, the onshore yuan CNY=CFXS was changing hands at 6.7560 at midday, 42 pips weaker than the previous late session close.

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