Firmer yuan fuels Chinese share gains on bets Beijing will tolerate appreciation
Chinese equities edged higher on Friday, led by BYD, after the offshore yuan climbed through 7 per dollar for the first time since 2024
The broad-based CSI 300 Index increased 0.3 per cent to 4,657.24 at the close of trading, adding to a 0.2 per cent rise a day earlier. The Shanghai Composite Index lifted 0.1 per cent. Hong Kong’s market was closed on Thursday and Friday for the Christmas holiday.
Among major gainers, electric-vehicle maker BYD jumped 5.5 per cent to 100.01 yuan, while peer Great Wall Motor advanced 2.8 per cent to 22.78 yuan. Solar photovoltaic inverter maker Sungrow Power Supply surged 7.9 per cent to 181.08 yuan, and lithium producer Ganfeng Lithium Group gained 3.7 per cent to 68.57 yuan.
Among major losers, printed circuit boards manufaturer Shennan Circuits slipped 1.8 per cent to 220.38 yuan, while telecommunication transceiver modules maker Zhongji Innolight fell 2 per cent to 627 yuan and energy drink producer Eastroc Beverage declined 1.4 per cent to 268.33 yuan.
The offshore yuan climbed past the key 7-per-dollar level on Thursday for the first time since September 2024, after the People’s Bank of China set its daily fixing at the strongest level in more than three months. The move fuelled speculation that policymakers may be willing to allow a measured appreciation to shore up market confidence.
“The yuan has been on a steady appreciation trend against the US dollar, with the offshore yuan breaking above the key 7-per-dollar level. That has eased pressure from foreign capital outflows and fuelled expectations of incremental inflows to support index gains,” strategists from Yingda Securities said in a note. “Policy support and currency strength are reinforcing each other, helping drive the market’s recent rebound.”