China Market extends losses on stimulus worries

Headline indices of the Mainland China equity market tumbled on Friday, 26 April 2019, as risk aversion selloff continued amid fears that China may scale back its stimulus measures after signs of economic stabilization. Meanwhile, caution ahead of Sino-U.S. trade talk next week also weighed on sentiments. At closing bell, the benchmark Shanghai Composite Index dropped 1.2%, or 37.43 points, to 3,086.40. The Shenzhen Composite Index, which tracks stocks on China's second exchange, sank 1.33%, or 22.45 points, to 1,665.80. The blue-chip CSI300 index shed 1.33%, or 52.55 points, to 3,889.27. For the week, Shanghai Composite Index and CSI300 index both lost 5.6 percent, their biggest weekly decline since Oct. 12, 2018.

China's central bank has no intent to tighten or relax monetary policy, a vice governor said on Thursday, as the market debates how much more support Beijing will give the economy after surprisingly resilient data was released last week.

Face-to-face talks are set to resume in Beijing next week. U.S. President Donald Trump said on Thursday he would soon host Chinese leader Xi Jinping at the White House, setting the stage for a possible agreement on trade between the world's two largest economies.

The White House said on Tuesday that Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer would travel to Beijing for additional talks on a trade dispute that has led to tit-for-tat tariffs between the two countries. Chinese Vice Premier Liu He, who will lead the Beijing talks for China, will also travel to Washington for more discussions starting on May 8, it said. "The subjects of next week's discussions will cover trade issues including intellectual property, forced technology transfer, non-tariff barriers, agriculture, services, purchases, and enforcement," the White House said. Beijing and Washington are seeking a deal to end a bitter trade war that has cost them billions of dollars, disrupted supply chains and rattled financial markets. Trump has said he expects to finalise the deal in a meeting with Xi.

CURRENCY NEWS: China's yuan appreciated against the U.S. dollar on Friday, due to strong mid-point fixing by central bank and after President Xi Jinping pledged to keep the currency stable. Prior to the market opening, the People's Bank of China (PBOC) set the midpoint rate at 6.7307 per dollar, the same as the previous day's fix. At 07:05 GMT, the yuan was quoted at 6.735 per U.S. dollar, 0.15% firmer than the previous close of 6.7448.

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