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China Stocks deepen losses
24-Sep-20   16:50 Hrs IST
The China share market tumbled on Thursday, 24 September 2020, in the wake of an overnight plunge on Wall Street on renewed concerns over a coronavirus-led slowdown in global economic recovery. Meanwhile, selloff fueled further on concern authorities will stiffen penalties against financial crimes.

At closing bell, the benchmark Shanghai Composite Index declined 1.72%, or 56.53 points, to 3,223.18. The Shenzhen Composite Index, which tracks stocks on China's second exchange, decreased 2.46%, or 54.10 points, to 2,148.8. The blue-chip CSI300 index dropped 1.92%, or 89.26 points, to 4,563.07.

The financial sector sub-index was lower by 1.35% and the consumer staples sector shed 1.68%. The real estate index was down 1.86% and the healthcare sub-index lost 1.63%.

The U.S. market tumble came as hopes for a recovery in the U.S. economy receded due to the lower-than-expected U.S. service sector purchasing managers index for September, released by British financial data provider IHS Markit. Investor sentiment was hurt by the U.S. Federal Reserve Chairman Jerome Powell expressing concern over economic uncertainties amid the novel coronavirus crisis, and pointing to the need for a new stimulus package. Additionally, a survey showed that business growth in the Euro zone ground to a halt in September, throwing economic recovery into question, as fresh restrictions to quell resurgence in coronavirus infections slammed the services industry into reverse.

Meanwhile, a recent increase in rising cases of Covid-19 in the US and other nations added to the weak sentiment, with some European countries imposing more social distancing measures.

Also, traders rushed to unwind their holdings of small-caps, which are typically targeted by speculators because of the small proportion of free-floating shares, after Premier Li Keqiang said on Wednesday that Beijing would ramp up a crackdown against stock manipulation and insider trading. Just a day later, the supreme court singled out seven major cases linked to stock and futures trading, echoing Li's call and showcasing its determination to clamp down on market excesses.

Zhengzhou Sino-Crystal Diamond, a smaller company on the ChiNext board, shed 19.9% to 5.71 yuan after the Shenzhen bourse restricted the trading of a retail investor who was found to have manipulated the stock this month.

All four IPO debutants - Beijing TopNew Info&Tech, Zhejiang Songyuan Automotive Safety Systems, Pinlive Foods and Friend Co. - surged on the mainland's exchanges. Beijing TopNew, an operator of data centres, was the best performer, jumping 446% from its offer price to 69.09 yuan on Shenzhen's ChiNext board. Zhejiang Songyuan, a car parts maker, surged 205% to 41.10 yuan. Pinlive Foods, a food retailer, gained 189% to 77 yuan, while Friend, which provides steel logistic supply-chain services, climbed 44% to 15.70 yuan.

CURRENCY NEWS: China's yuan eased against greenback on Thursday, after the central bank set a fixed softer mid-point rate. Prior to the market's opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.8028 per dollar, down by 0.06% than previous day fix of 6.7986. In the spot market, onshore yuan CNY=CFXS was changing hands at 6.817, lower by 0.12% from the previous day session close at 6.809.

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