China Shares falls as COVID flare ups

Mainland China share market finished session lower on Tuesday, 12 July 2022, as risk sentiments weighed down on outlook for China's economic recovery after Shanghai reported its first case of the highly infectious BA.5 omicron sub-variant, with several cities adopting fresh measures.

China discovered its first case of a highly transmissible Omicron sub-variant in Shanghai and those new cases had jumped to 63 in the China's largest city from 52 a day earlier. Traders were nervous that the discovery of the new sub-variant and the highest number of daily new cases in Shanghai since May could lead to another round of mass testing, and more Covid lockdowns may lay ahead.

At close of trade, the benchmark Shanghai Composite Index fell 0.97%, or 32.12 points, to 3,281.47. The Shenzhen Composite Index, which tracks stocks on China's second exchange, shed 1.45%, or 31.78 points, to 2,155.56. The blue-chip CSI300 index was down 0.94%, or 41 points, to 4,313.62.

CURRENCY NEWS: China's yuan softened against the U.S. dollar, as weaker mid-point fixing by central bank. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.7287 per dollar, 0.49% weaker than the previous fix at 6.696. In the spot market, the onshore yuan CNY=CFXS was changing hands at 6.735 at midday, 0.31% weaker than the previous late session close.

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