China Socks fall on bubbles woes

March 02,2021

The Mainland China share market finished session lower on Tuesday, 02 March 2021, as worries over policy tightening after the nation's top banking regulator jolted markets with a warning about the need to reduce leverage amid the rising risk of bubbles globally and in the local property sector. Meanwhile, selloff was also fueled on caution ahead of key the National People's Congress (NPC) conference in Beijing that starts on Friday.

At closing bell, the benchmark Shanghai Composite Index declined 1.21%, or 42.81 points, to 3,508.59. The Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 0.7%, or 16.41 points, to 2,332.76. The blue-chip CSI300 index fell 1.28%, or 69.15 points, to 5,349.63.

Guo Shuqing, head of the China Banking and Insurance Regulatory Commission, said he's “very worried” about risks emerging from bubbles in global financial markets and the nation's property sector, sparking fresh concerns about further tightening in the world's second-biggest economy.

Global markets are starting to see side effects of fiscal and monetary policy steps in response to the COVID-19 pandemic, said Guo on Tuesday, adding that China was studying measures to manage capital inflows.

CURRENCY NEWS: China's yuan softened slightly against the U.S. dollar on Tuesday. In the spot market, the yuan CNY=CFXSopened at 6.4675 per dollar and was changing hands at 6.4725 at midday, slightly weaker than Monday's close. That came despite the People's Bank of China setting the midpoint rate CNY=PBOC at 6.4625 per dollar prior to market open, firmer than the previous fix of 6.4754.

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