China Market falls on renewed US-China diplomatic tension

July 14,2020

The China share market finished session lower on Tuesday, 14 July 2020, as profit taking selling dominated due to simmering diplomatic tensions between Washington and Beijing over the South China Sea. At closing bell, the benchmark Shanghai Composite Index dropped 0.83%, or 28.67 points, to 3,414.62. The Shenzhen Composite Index, which tracks stocks on China's second exchange, fell 0.85%, or 19.83 points, to 2,309.57. The blue-chip CSI300 index declined 0.95%, or 46.27 points, to 4,806.69.

Market players moved to lock in profits from the outset, amid renewed tensions between Beijing and Washington after the Trump administration rejected China's expansive maritime claims in the South China Sea, reversing a previous policy of not taking sides in such disputes. US Secretary of State Mike Pompeo said Monday that Washington would treat Beijing's pursuit of resources in the dispute-rife South China Sea as illegal, ramping up support for Southeast Asian nations.

ECONOMIC NEWS: China Exports Rise In June- China's exports grew 0.5% on a yearly basis in June, data from the General Administration of Customs revealed Tuesday. Likewise, imports increased 2.7% annually. The trade surplus totalled $46.42 billion versus $62.9 billion surplus posted in May.

CURRENCY NEWS: The yuan edged down against the dollar on Tuesday, 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 6.9996 per dollar, 31 pips or 0.04% weaker than the previous fix of 6.9965. In the spot market, onshore yuan CNY=CFXS was changing hands at 7.0107 at midday, 127 pips weaker than the previous late session close.

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