China stocks down for the week even as yuan surge lifts mood

SHANGHAI: China stocks slipped yesterday to snap a threeweek winning streak, as defensive consumers stepped back from a rally, although there were signs investors are pumping fresh money into a market buoyed by solid economic growth and a resurgent yuan.

The blue-chip CSI300 index fell 0.1 per cent, to 3,825.99 points, while the Shanghai Composite Index was flat at 3,365.24 points.

For the week, both CSI300 and SSEC shed 0.1 per cent.

The Shanghai index remains firmly above the 3,300 mark for the 11th session in a row, a psychologically important level that had posed stiff resistance for the benchmark since early 2016.

The defensive consumer firms lost 2.9 per cent in the week to be the biggest drag on the market, while developers led the gains with a 6 per cent jump, as investors rotate into more aggressive sectors amid expectations that China’s economy will remain largely robust through the year-end.

With the yuan surging to a near 21-month high and taking centre stage again on Friday, investors who shrugged off China’s August trade data pushed up sectors such as commodities, airlines and gold, betting they would benefit from the Chinese currency’s bullishness, and dollar weakness.

“If history is any guide, yuan and Chinese equities are highly correlated,” said Wu Kan, fund manager head of equities trading at Shanshan Finance.