MNI China Daily Summary: Tuesday, September 30

POLICY: Chinese authorities should strengthen counter-cyclical measures to support demand as price-related indices continued to weaken in September, analysts with the China Federation of Logistics and Purchasing said, commenting on the latest Manufacturing Purchasing Managers’ Index.

DATA: China's Manufacturing Purchasing Managers Index edged up 0.4 points to 49.8 in September, staying below the breakeven 50 mark for the sixth month, data from the National Bureau of Statistics showed.

DATA: China's RatingDog manufacturing PMI, previously known as the Caixin manufacturing PMI, came in at 51.2 in September, up from August's 50.5, staying in the expansionary zone above the 50 mark for the second month, as rising new orders drove faster production growth, the publisher said.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY242.2 billion via 7-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net drain of CNY33.9 billion after offsetting maturities of CNY276.1 billion today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) decreased to 1.4376% from 1.5873%, Wind Information showed. The overnight repo average edged up to 1.3875% from 1.3103%.

YUAN: The currency strengthened to 7.1186 against the dollar from the previous 7.1204. The PBOC set the dollar-yuan central parity rate lower at 7.1055, compared with 7.1089 set on Monday. The fixing was estimated at 7.1180 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.8775%, down from the previous close of 1.8875%, according to chinamoney.com.cn.

STOCKS: The Shanghai Composite Index edged up 0.52% to 3,882.78, while the CSI300 index was up 0.45% at 4,640.69. The Hang Seng Index gained 0.87% at 26,855.56.

FROM THE PRESS: The CNY500 billion policy-based financial instruments announced by the National Development and Reform Commission Monday are expected to leverage about CNY6 trillion in investment, equivalent to 24% of the total infrastructure investment in 2024, Yicai.com reported citing Wang Qing, analyst with Golden Credit Rating. The new tool, aimed at replenishing project capitals, will likely drive the infrastructure investment growth by 3-4 percentage points within three years, Wang said. The figure grew by 2% y/y in the first eight months, decelerating by 1.2 pp from the Jan-Jul period.

China has firmly opposed the U.S.’s extension of export restrictions from a single listed entity to its subsidiaries in which it holds more than 50% of the shares and urged Washington to immediately correct its wrongful practice and stop the unreasonable suppression of Chinese companies, the Ministry of Commerce said in a statement late Monday. China will take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises, the statement said.

China’s capital market will continue with its stable and positive development supported by good economic momentum, coordinated policy efforts, and inflows of medium- and long-term funds, said Securities Daily in a commentary. The stock market valuation is returning to a reasonable range at an accelerated pace, which has improved the safety margin of the market and led to insurance and mutual funds increasing their allocation, which will help smooth short-term market fluctuations and guide more rational investment behaviour, the newspaper said.