China Market falls on weak economic data

Mainland China share market finished session lower on Tuesday, 17 January 2023, as risk sentiments spooked by weak economic growth data and caution ahead of the long Lunar New Year holiday that begins this weekend.

At close of trade, the benchmark Shanghai Composite Index fell 0.1%, or 3.35 points, to 3,224.25. The Shenzhen Composite Index, which tracks stocks on China's second exchange, eased 0.03%, or 0.73 point, to 2,094.26. The blue-chip CSI300 index was down 0.02%, or 0.72 point, to 4,137.24.

China's economic growth in 2022 slumped to one of its worst showings in nearly half a century, with the fourth quarter hit hard by stringent COVID 19-related curbs and a property market slump,

China's gross domestic product posted an annual growth of 2.9% in the fourth quarter, weaker than the 3.9% expansion seen in the third quarter, according to data from the National Bureau of Statistics (NBS)revealed on Tuesday. In the whole year of 2022, GDP growth was 3%, missing government's target of around 5.5%. China's provinces are projecting economic growth of 5-6% for 2023.

NBS data also showed that retail sales dropped only 1.8% annually in December. Moreover, industrial output, an important economic indicator, expanded by 3.6% year-on-year in 2022 and 1.3% in December. China's fixed-asset investment went up 5.1% in 2022.

CURRENCY NEWS: China's yuan weakened against the dollar on Tuesday, inline with softer mid-point fixing by China's central bank. Prior to the market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.7222 per dollar, 87 pips or 0.13% weaker than the previous fix of 6.7135. In the spot market, the onshore yuan CNY=CFXS opened at 6.7321 per dollar and eased to a low of 6.7676 at one point, the weakest since Jan. 11. By midday, it was changing hands at 6.7605, 225 pips softer than the previous late session close.

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