Hawkish Fed, stronger dollar set gold up for longest monthly losing spree

Oct 31 (Reuters) – Gold edged lower on Monday and was headed for its longest streak of monthly losses on record as a stronger dollar, elevated US bond yields and prospects for more rate hikes from the Federal Reserve dented the non-yielding metal’s appeal.

Spot gold fell 0.4% to USD 1,635.64 per ounce by 2:18 p.m. ET (1818 GMT), and was set for its seventh straight monthly decline, down about 1.5% this month.

US gold futures settled down 0.3% to USD 1,640.70.

A combination of factors from the expected rate hikes, the relative strength of the dollar and rising yields continue to pressure gold prices, said David Meger, director of metals trading at High Ridge Futures.

The dollar index rose 0.7%, making gold more expensive for other currency holders. The benchmark 10-year Treasury yields also edged up.

The Fed is widely expected to increase interest rates by 75 basis points at the policy meeting on Nov. 2. Traders will be keen on the Fed’s commentary on future rate hikes amid debate over when to downshift to smaller rate hikes.

Gold is highly sensitive to rising US interest rates, as that increase the opportunity cost of holding it. Gold prices have fallen more than USD 400 since scaling above the USD 2,000 per ounce level in March.

Spot silver fell 0.3% to USD 19.17 per ounce.

Platinum fell 2% to USD 925.52, but was headed for its biggest monthly gain since February 2021.

“We believe platinum’s wide discount to palladium should support substitution in the car industry and lift prices over the next 12 months,” UBS analysts said in a note.

Meanwhile, palladium slipped 2.6% to USD 1,850.03 and was set for its biggest monthly drop since May.

“Weaker industrial demand due to slower economic growth in Europe and the US and substitution from palladium to platinum will weigh on prices,” UBS analysts said.

(Reporting by Seher Dareen and Brijesh Patel in Bengaluru; Editing by Shailesh Kuber and Shinjini Ganguli)

Oil funds trapped between low inventories and slowing economy: Kemp

LONDON, Oct 31 (Reuters) – Portfolio investors’ oil positions are exhibiting significant week-to-week volatility as traders struggle to anticipate the net effect of an economic slowdown amid exceptionally low inventories of crude and diesel.

Hedge funds and other money managers purchased the equivalent of 33 million barrels in the six most important petroleum futures and options contracts in the week to Oct. 25.

The previous four weeks saw two large purchases (+62 million and +47 million barrels) and two large sales (-34 million and -50 million barrels) as investor sentiment see-sawed.

The mixed picture continued last recent week, with heavy buying of Brent (+29 million barrels), and smaller purchases of NYMEX and ICE WTI (+6 million) and US gasoline (+6 million).

But that was partly offset by small sales of US diesel (-4 million) and European gas oil (-2 million).

Fund managers still have an overall bullish bias on petroleum with long positions outnumbering shorts by a ratio of 5.17:1 (66th percentile for all weeks since 2013).

But uncertainty is high and confidence is low, with a net position of just 503 million barrels (33rd percentile for all weeks since 2013).

In Brent, the long-short ratio is in the 75th percentile (bullish) but the net position is only in the 41st percentile (relatively low confidence).

In middle distillates, the long-short ratio is in the 74th percentile, but the net position is more modest in the 58th percentile.

US and global crude and distillates inventories are at their lowest seasonal levels for decades, which creates an upside bias for prices.

But the US Federal Reserve is raising interest rates at the fastest clip for 40 years to squeeze inflation out of the economy.

And most other major central banks are following suit, resulting in a rapid tightening of financial conditions around the world.

The resulting cyclical slowdown is likely to dampen crude and distillate consumption and rebuild inventories to more comfortable levels.

The timing of any rebuild is uncertain, however, and inventories could remain tight or even deplete further in the short term.

In addition to purely economic factors, EU sanctions on maritime and insurance services for Russia’s crude and distillate exports scheduled to go into effect in December and February could tighten supplies even further.

With so many conflicting drivers, traders and investors are struggling to form a medium-term perspective on prices with any conviction, leaving the market directionless in the meantime.

(John Kemp is a Reuters market analyst. The views expressed are his own; Editing by Jan Harvey)

Asia bond funds dump China in favor of cash after high-yield rout

HONG KONG, Oct 31 (Reuters) – Bond fund managers with strategies focused on Asian high-yield issuers have switched to cash and other non-China assets after suffering huge losses in China’s corporate bond market.

Once a sought-after investment that accounts for more than half of Asia’s high-yield corporate bond issuance, China’s property sector saw a record number of defaults in 2022 across top private developers and even some state-owned companies.

Capital outflows triggered by aggressive Federal Reserve interest rate hikes struck another blow to the already fragile segment.

Monica Hsiao, founder and chief investment officer of Triada Capital, an Asia-focused credit long-short fund, says she has not seen this kind of challenge in an investment career spanning more than 20 years.

“We hold over 50% of cash at the moment, higher than any time historically,” said Hsiao, who founded the fund in Hong Kong in 2015.

Hsiao, who managed Asia credit for London-based credit-focused asset manager CQS prior to setting up Triada, did not disclose the fund’s size and its performance.

More than two dozen Chinese property developers rated by Moody’s have defaulted since the beginning of 2021 and that has pushed the number of Asian high-yield companies rated junk to a record high.

Many holders of China high yield bonds have seen them trading below 20 cents on the dollar. The in-default bonds of property company Sunac China 1918.HK maturing in 2025 trade at 6 cents to a dollar.

The average return of the top 10 Asia high yield bonds is down more than 30% this year, Morningstar data shows, of which Fidelity Funds’ Asian High Yield Fund and UBS’s SICAV – Asian High Yield (USD) had shed more than 40% as of Oct. 27.

The property sector, crucial to China’s political and economic stability, has seen sharp declines in prices and sales after policymakers imposed strict curbs on borrowing by developers in mid-2020.

Hsiao said investors were hoping for policy measures to prop up real estate demand this year but that didn’t happen.

Hsiao kept reducing her fund’s China exposure from the first quarter and shifted to cash in the summer months, when the US inflation threat and geopolitical risks increased.

‘UNINVESTABLE’ ASSET CLASS

Gordon Ip, chief investment officer for fixed income at asset manager Value Partners，says the fund has reduced overall exposure to China property and bought Indonesian and Indian bonds this year, mostly in energy or resources and renewables sectors.

Value Partners’ Greater China High Yield Income Fund was down 37% as of the end of September. The fund’s assets have fallen to USD 611 million from USD 980 million at the end of April.

“This has been an extraordinary year in terms of managing risks,” said Ip. “Rising rates, skyrocketing inflation, geopolitical tensions and intense sector risk (China property) have made it extremely challenging to navigate the market.”

Ip said the fund has been staying liquid by trying not to “over own” a particular issue and making sure it always has a reasonable level of cash.

Bond investors are generally sitting tight and already looking ahead to next year, said Nicholas Yap, head of Asia Flow Credit Desk Analysts at Nomura.

Investors do not see China’s property debt markets reviving anytime soon, given not just regulatory risks but also several developers’ differentiated treatment of onshore and offshore bondholders in the restructuring process.

“There is no reliable restructuring process in China that coordinates between onshore and offshore,” said Hsiao, adding she sees barely any willingness among defaulted issuers to negotiate.

While there are select bonds that have upside, China high yield as an asset class is currently “uninvestable”, she said.

“We’re right in the perfect storm. We hope for the best, but prepare for the worst,” she said.

(Reporting by Summer Zhen; Editing by Vidya Ranganathan and Muralikumar Anantharaman)

Bowing to investor demand, funds ramp up ex-China emerging market strategies

HONG KONG/SHANGHAI, Oct 31 (Reuters) – Money managers are launching emerging market or Asia products with no exposure to China to meet increasing demand for such strategies from global investors wary of rising policy and geopolitical risks in the world’s second biggest economy.

Chinese equities make up 31% of the MSCI Emerging Market index, a popular stock index that many funds track and benchmark their performances against.

With Chinese equities floundering over the past two years due to a government crackdown on its technology sector, a real estate liquidity crisis, and rising US-China tensions, broad emerging market funds have seen their returns eroded, resulting in investors clamoring for carving out their exposure to the world’s biggest emerging market.

Matthews Asia, a US based asset manager that specializes in Asian investments and manages more than USD 14 billion, is among the latest to have launched a new product with an Asia ex-China strategy, say two sources familiar with the matter who asked to stay unnamed as they are not authorized to speak to media.

Matthews Asia did not respond to Reuters queries.

Fund industry sources said this approach is gaining ground.

“Given China takes a heavy weight in the indices and to mitigate risks from the Chinese market”, some funds are starting to introduce products targeting these markets but excluding exposure to China, Haitong International Securities Group Ltd, a state-backed securities firm based in Hong Kong, said in a memo issued last week and reviewed by Reuters.

Two investment managers with long-only strategies based in the United States have started issuance of such products, it said.

Haitong noted that foreign investors were concerned with heightened Sino-US geopolitical tensions and how that would affect Taiwan, and the sanctions imposed by the US government on China, mainly its semiconductor and biomedical industries.

Fund research firm Morningstar tracks nine new emerging market ex-China equity mutual funds and exchange-traded funds (ETFs) that were created this year, matching the number of launches in total over the previous two years.

The latest ones include funds issued by Goldman Sachs Asset Management, WisdomTree Investments (WETF) and RBC Global Asset Management. Abrdn and Invesco have refashioned existing products into ex-China funds.

Rob Brewis, a portfolio manager at UK-based asset manager Aubrey Capital Management Ltd, said the firm had seen growing calls over the past year from American investors to remove China from its emerging market portfolio, alongside the rising tensions and restrictions being imposed on investing in China.

“We are starting to see requests from UK investors this month,” he said.

If Aubrey was to remove China from its emerging market strategy, the Indian market would take a significant portion, while the rest will be spread around other countries including Vietnam, Brazil and Mexico, he said.

OUTFLOWS

Andrew McCaffery, Fidelity International’s global chief investment officer, said they have received increased requests from clients for emerging markets excluding China strategies, although the purpose was to “break China out as an allocation separately within global portfolios”.

Flows and portfolio data bear testimony to investor disenchantment with Chinese markets.

China-only ETFs have seen outflows recently, with October set to be the third straight month of outflows, whereas Asia equity ETFs have received inflows in most months this year, Refinitiv Lipper data shows.

Fund filings from 280 active emerging market strategies show their weight for Chinese and Hong Kong equities peaked at the end of October 2020, right before China started sweeping crackdowns on new economy companies, including fintech giant Ant Group.

After a brief blip higher in mid-2022, allocations are towards the lower end of the three-year range, said Steven Holden, director and founder of Copley Fund Research.

“With the recent price movements, expect those weights to be much lower,” he said.

Goldman Sachs, in a report issued on Friday, estimated that USD 100 billion to USD 200 billion of foreign holdings could be at risk if global funds cut their allocation to Chinese equities meaningfully, while global active funds have sold around USD 30 billion in Chinese equities over the past year.

Fidelity’s McCaffery said significant further underweighting of China is unlikely, given its global importance and as the country looks to stabilise externally and internally after President Xi Jinping secured a third term this month.

“The challenge is that they (global investors) are not going to be quick to add back in,” he said.

(Reporting by Xie Yu and Samuel Shen; Additional reporting by Gaurav Dogra in Bengaluru; Editing by Vidya Ranganathan and Muralikumar Anantharaman)

Oil falls on US output gains, Chinese demand doubts

HOUSTON, Oct 31 (Reuters) – Oil prices fell on Monday on expectations that US production could rise and as weaker economic data out of China and the country’s widening COVID-19 curbs weighed on demand.

Global benchmark Brent crude futures dropped 94 cents, or 0.98%, to USD 94.83 a barrel. US West Texas Intermediate (WTI) crude fell USD 1.37 to USD 86.53 a barrel, a 1.6% loss.

Both benchmarks notched their first monthly gains since May.

Oil output in the United States climbed to nearly 12 million barrels per day in August, the highest since the onset of the COVID-19 pandemic, monthly government data showed.

US President Joe Biden was set to call on oil and gas companies to invest some of their record profits in lowering costs for American families, a White House official said.

Biden will call on Congress to consider requiring oil companies to pay tax penalties and face other restrictions, the official said. The president has previously pushed oil companies to raise production rather than use profits for share buybacks and dividends.

The administration has also relied on releasing supplies from the Strategic Petroleum Reserves (SPR) to ease a supply crunch. About 1.9 million barrels were released from the SPR last week as part of the government’s plan to release 180 million barrels.

Meanwhile, factory activity in China, the world’s largest crude importer, fell unexpectedly in October, an official survey showed on Monday, weighed down by softening global demand and strict COVID-19 restrictions that hit production.

“The purchasing managers’ index (PMI) data contracting adds to the post-China congress party blues for oil markets. It is not difficult to draw a straight line from weaker PMIs to China’s COVID-zero policy,” said Stephen Innes, managing partner of SPI Asset Management.

“So long as COVID-zero remains entrenched, it will continue to thwart oil bulls.”

Chinese cities are stepping up zero-COVID curbs as outbreaks widen, dampening hopes of a rebound in demand.

Strict COVID-19 curbs in China have hit economic and business activity, curtailing oil demand. China’s crude oil imports for the first three quarters of the year fell 4.3% year on year for the first annual decline for the period since at least 2014.

Meanwhile, the euro zone is likely to enter recession, with its October business activity contracting at the fastest in nearly two years, a S&P Global survey said.

European Central Bank policymakers are standing behind plans to keep raising interest rates, even if it pushes the bloc into recession and stirs political resentment.

The Organization of the Petroleum Exporting Countries (OPEC) on Monday raised its forecast for medium and long-term oil demand and said USD 12.1 trillion of investment is needed to meet this demand despite the energy transition.

(Reporting by Noah Browning; Additional reporting by Florence Tan and Emily Chow; Editing by David Goodman, Barbara Lewis and David Gregorio)

Yen falls on dovish BOJ as market awaits Fed decision

NEW YORK, Oct 28 (Reuters) – The yen fell more than 1% against the dollar on Friday after the Bank of Japan bucked the trend among other major central banks and stuck with ultra-low interest rates, while the greenback firmed after US data showed inflation was still running hot.

The greenback was under pressure this week ahead of the Federal Reserve’s Nov. 1-2 policy setting meeting. The central bank is expected to raise rates by 75 basis points for the fourth-straight time before “pivoting” to a slower pace of rate hikes, which the market has begun pricing in.

“The bottom line is that if the Fed does not pivot toward a more forward-looking stance, the result will be a more restrictive monetary policy than otherwise required,” said Admir Kolaj, an economist at TD Securities.

The dollar index was on track for a weekly decline of around 1%.

Speculation over the timing of a Fed pivot has weakened the dollar, yet the greenback still gained on the yen after BOJ Governor Haruhiko Kuroda said Japan was nowhere near raising rates, with inflation in the country likely to fall short of its 2% target for years to come.

The yen fell as much as 1.07% in aftermath of the BOJ’s decision. At 3:00 p.m. EDT (1900 GMT), the Japanese currency was down 0.83% at 147.5. For the week, the yen was down around 0.17%.

Kuroda dismissed the view the BOJ’s yield cap was to blame for recent sharp declines in the yen, reinforcing views that the central bank will not use rate hikes to prop up the currency.

“The BoJ still carries the baton as the most accommodative G7 central bank,” said Stephen Innes, managing partner at SPI Asset Management. “That leaves USDJPY very much at the mercy of broad dollar trends that, in turn, reflect moves in US fixed income.”

Sterling rose against the dollar, adding to gains earlier in the week following the appointment of Rishi Sunak as Britain’s third prime minister in two months. The pound was up 0.39% at USD 1.1609, on track for a weekly rise of around 2.65%.

The euro EUR=EBS dipped 0.1% to USD 0.9955, adding to Thursday’s more than 1% drop after the European Central Bank raised rates by 75 basis points, as expected, but took a more dovish tone on its rate outlook. For the week, euro was up around 0.93%.

The common currency was somewhat supported by German data, which showed that Europe’s biggest economy unexpectedly avoided a recession in the third quarter, while inflation, driven by a painful energy standoff with Russia, surprised to the upside.

US data on Thursday showed that consumer spending rose more than expected in September while underlying inflation pressures continued to bubble, keeping the Fed on track to hike interest rates by 75 basis points next week.

“The data that came in this week gave Fed Chairman Jerome Powell a lot of credit because he has been adamant about the economy being strong enough to withstand the hikes,” said Juan Perez, director of trading at Monex USA.

“A strong economy leads to faith in the economy but inflation must be battled with high rates, which only make the dollar stronger,” he said.

The more dovish ECB and the Bank of Canada’s smaller-than-expected interest rate hike this week helped drive expectations of a Fed pivot.

The dollar was also firmer against the Swiss franc and the Australian dollar.

(Reporting by John McCrank in New York; Editing by Richard Pullin, Jacqueline Wong, Simon Cameron-Moore, Alison Williams, Ken Ferris and David Gregorio)

Hopeful US stock rally set for date with Federal Reserve reality

NEW YORK, Oct 28 (Reuters) – A bounce in US stocks that has defied a barrage of major earnings disappointments faces a key test in the coming week, when the Federal Reserve’s next meeting could shed light on how long it will stick to the aggressive monetary policies that have crippled asset prices in 2022.

Betting on a less hawkish Fed has been a dangerous undertaking this year. Stocks have repeatedly rebounded from lows on expectations of a so-called Fed pivot, only to be crushed anew by fresh evidence of persistent inflation or a central bank bent on maintaining its pace of rate increases.

Pockets of softness in the US economy have fueled recent hopes of a tempering of rate hikes, along with signs that some of the world’s central banks may be nearing the end of their rate hiking cycles. Meanwhile, cash-heavy investors afraid of missing out on a sustained rally have contributed to the bullish move, market participants said.

“The market is starting to believe that there is an endgame in sight for this huge global tightening cycle,” said Keith Lerner, co-chief investment officer at Truist Advisory Services.

The S&P 500 was on pace to end the week with a gain of over 3%, as investors shrugged off brutal earnings reports from companies such as Amazon (AMZN), Microsoft (MSFT), Google parent Alphabet (GOOGL) and Facebook parent Meta Platforms (META).

The benchmark index is up over 8% from its most recent low, a move that has been accompanied by a sharp rally in US Treasuries and a weakening of the dollar, reversing trends that have prevailed for most of the year.

A smaller than expected rate increase by the Bank of Canada added to hopes of a peak in global central bank hawkishness, as did comments from a Bank of Mexico board member cautioning against increasing monetary policy to excessively restrictive levels.

While investors have broadly factored in a 75-basis-point rate hike on Wednesday at the end of the Fed’s two-day meeting, many will be looking for hints of future policy moves in Chairman Jerome Powell’s press conference, as his comments have swayed asset prices this year.

For example, stocks rallied ahead of the Fed’s conference in Jackson Hole, Wyoming, in August, only for the market to decline anew after Powell warned about economic fallout from the Fed’s efforts to fight inflation.

“If his tone is as terse and as hawkish as it was in August at Jackson Hole, that would certainly change the narrative rather rapidly,” said Art Hogan, chief market strategist at B. Riley Wealth.

Next week will also test whether stocks can continue to weather disappointing earnings news. More than 150 S&P 500 companies are due to report quarterly results next week, including Eli Lilly (LLY), ConocoPhillips (COP) and Qualcomm (QCOM).

Investors will also closely watch next Friday’s monthly jobs report for signs of whether the Fed’s actions have tempered the labor market.

Plenty of investors believe it’s too early to hope for a slowing of rate hikes. Analysts at UBS Global Wealth Management said the Fed has yet to see evidence of cooling inflation and labor market conditions and that they “continue to think that it is too early to expect the Fed to signal a more dovish stance.”

“Conditions for an equity market bottom, including that rate cuts and an economic trough need to be on the horizon, are not yet in place,” the UBS analysts said in a note.

Lerner, of Truist, on Friday issued a report downgrading his view on equities to “less attractive” from “neutral” following the rebound. He said that while stocks have become cheaper on an absolute basis this year, “they have actually become more expensive relative to bonds given the sharp rise in interest rates.”

For now, however, it appears the bulls are emboldened. One example of investor enthusiasm can be seen in the options market, where the one-month average daily volume of S&P 500 puts, typically used for defensive positioning, outnumbers bullish calls by the smallest margin in at least four years, according to Trade Alert data.

“The market is thinking good things,” said Kristina Hooper, chief global market strategist at Invesco. “Jay Powell will either confirm that or dispel that next week.”

(Reporting by Lewis Krauskopf; additional reporting by Saqib Iqbal Ahmed; Editing by Ira Iosebashvili and Nick Zieminski)

US recap: Dollar firms as Fed, BoE come into view

Oct 28 (Reuters) – The dollar index held onto gains of 0.31% heading toward the close of a mixed session on Friday after close-to-consensus US PCE and ECI data allowed traders to look ahead to Fed and BoE rate announcements on Nov 2 and 3.

At 110.90, the index has rebounded off weekly lows respecting 109.22, the 50% Fib of 103.66-114.78 June-Sept rise.

Both the Fed and BoE are expected to hike 75bp next week, with some market participants expecting the US central bank to shift to a less aggressive rate stance amid rising recession fears.

GBP/USD rose 0.3% to 1.1595, unable, for the third consecutive session, to hold gains above 1.16.

Cable’s shallow dip from recent trend highs indicates an underlying bid for sterling with traders curating longs ahead of the key central bank meetings.

With the UK political horizon clearing and the BoE expected to ultimately match the Fed on rates, further gains may be in the offing for GBP as traders unwind recent shorts.

EUR/USD remained on the backfoot after Thursday’s dovish 75bp ECB hike. Euribor futures are pricing in euro zone rates stalling near 3% in early 2023, nearly 200bp below US and UK rates sapping the EUR of recent vigor.

USD/JPY rose 0.96% to 147.66. The BoJ’s dovish hold and guidance kept USD bulls’ hopes alive as it pledged to add further accommodation as needed, torpedoing hopes for an upward adjustment in yield curve control or rate hikes as inflation ticks higher.

The takeaway from the BoJ and recent Japanese intervention is that the yen will continue to weaken but the MOF will take steps to manage the currency’s decline.

Cryptocurrencies eked out gains after early NorAm weakness, the equities rally supporting a 1.5% rise in bitcoin and 2.4% gain for ether.

US Treasury yields moved higher as traders still expect a further 135bp in Fed hikes by year-end 2022.

(Editing by Burton Frierson; Paul Spirgel and Christopher Romano are Reuters market analysts. The views expressed are their own.)

Gold down 1% as dollar, yields rise on Fed rate-hike bets

Oct 28 (Reuters) – Gold fell more than 1% on Friday as the dollar and bond yields climbed after data showed underlying inflation pressures remained high, cementing expectations around another hefty rate hike from the US Federal Reserve next week.

Spot gold fell 1.3% to USD 1,641.30 per ounce by 1:43 p.m. ET (1743 GMT). US gold futures settled down 1.3% at USD 1,644.8.

Consumer spending, which accounts for more than two-thirds of US economic activity, rose 0.6% last month, the Commerce Department said.

“There is concern that core PCE at 0.5% monthly or 6% on an annual basis will keep the Fed relatively more aggressive and a slowdown in hikes will come later rather than sooner,” said Tai Wong, a senior trader at Heraeus Precious Metals in New York.

Gold has been a little disappointing this week given the huge bond rally and the dollar moving lower – which should have seen it head towards USD 1,700, he added.

The dollar gained 0.3% against its rivals after the US economic data, making gold more expensive for other currency holders. The benchmark US Treasury yields also rose.

The Fed is widely expected to raise interest rate by 75 basis-point at its policy meeting on Nov. 1-2. For December, traders are largely expecting a 50 basis point increase.

Gold is highly sensitive to rising US interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar.

“Another pronounced rate hike of 75 basis points is generally anticipated after US inflation remained stubbornly high again in September,” Commerzbank analysts said in a note.

“That said, if the central bankers were to hint that they will raise their key rate at a less aggressive pace in future – in response to the cooling economy, for instance – the gold price could be lent some tailwind.”

Spot silver fell 2.1% to USD 19.17 per ounce, platinum dropped 1.8% to USD 942.13, while palladium declined 2.4% to USD 1,895.46.

(Reporting by Seher Dareen and Brijesh Patel in Bengaluru; Editing by Maju Samuel)

China to launch market-making on tech-focused STAR Market on Monday

SHANGHAI, Oct 28 (Reuters) – China’s Nasdaq-style STAR Market will officially launch market making on Monday, in a bid to make the tech-focused board more liquid, vibrant and resilient, the Shanghai Stock Exchange said.

The first batch of qualified market markers on STAR will start trading next week, which will cut investors’ trading cost, and improve pricing efficiency, the bourse said in a statement on its website.

The STAR Market, home to some of China’s biggest chipmakers, biotech companies and high-end manufactures, is tasked with funding Beijing’s tech innovation amid growing Sino-U.S. rivalry.

The Shanghai Stock Exchange said it will continue to improve market mechanisms to help China achieve tech independency and self-sufficiency.

Regulators have approved 14 brokerages as the first batch of market makers, which actively quote in stocks, providing liquidity and depth to the market.

They include Industrial Securities, Guotai Junan Securities, and Sinolink Securities.

(Reporting by Shanghai Newsroom; Editing by Toby Chopra)

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