stock market Photo:VCG

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The US and its European allies' sanctions to exclude Russia from SWIFT hit the Chinese A-share markets with all three major indices opening lower on Monday morning, while the move also shored up the growth of some digital currency shares on the Chinese market. 

The Shanghai Composite Index was down 0.03 percent while the Shenzhen Component Index fell 0.11 percent when markets opened on Monday. The ChiNext Index opened down 0.38 percent . 

Infrastructure and tourism stocks dragged down the market while stocks of oil and gas, precious metals and digital currency rose. 

As of 10:20 am on Monday, shares of digital currency had jumped 3.2 percent on A-share markets, while Chinese fintech stocks Forms Syntron and Infosec had already hit their trading limit.

Investors' confidence in digital currency came after actions by the US, European Commission, France, Germany, Italy, the UK and Canada which said they would take measures to ensure that "selected Russian banks" are removed from the SWIFT interbank messaging system.

SWIFT, or the "Society for Worldwide Interbank Financial Telecommunication," is a secure messaging system that facilitates rapid cross-border payments. It currently is the principal mechanism for financing international trade, linking more than 11,000 financial institutions in more than 200 countries and regions. Russia accounted for about 1.5 percent of its transactions in 2021, media reports said.

One important method to offset the SWIFT exclusion impact is to settle foreign trade payments in currencies other than the US dollar, as the SWIFT system is primarily for dollar settlements, Chinese experts noted.

Global Times