China Market falls before Trump-Xi summit

The Mainland China equity market closed down on Friday, 28 June 2019, as traders stayed sidelined ahead of Presidents Donald Trump and Xi Jinping meet at the weekend G20 summit in Osaka that could lead to progress in ending a year-long trade war between the world's two largest economies. Market losses were, however, limited after Xi reiterated Beijing's vows to remove restrictions on foreign investment outside the country's so-called negative list, which sets out industries where foreign investment is limited or prohibited. At closing bell, the benchmark Shanghai Composite Index declined 0.6%, or 17.91 points, to 2,978.88. The Shenzhen Composite Index, which tracks stocks on China's second exchange, was down 0.96%, or 15.13 points, to 1,562.42. The blue-chip CSI300 index shed 0.24%, or 9.23 points, to 3,825.59.

Investors looked toward developments on the U.S.-China trade front, with Presidents Donald Trump and Xi Jinping set to meet at weekend G-20 summit in Osaka. U.S. President Donald Trump has agreed to no preconditions for his high-stakes meeting with Chinese President Xi Jinping at the G20 summit in Osaka, Japan, on Saturday.

A positive outcome could provide the market with a boost while a collapse in discussions could be a weight. An agreement between Trump and Xi at the G-20 summit in Japan could avert the next round of tariffs on additional $300 billion worth of Chinese imports.

At the G-20 summit, Xi told a meeting of the BRICS (Brazil, Russia, India, China, South Africa) countries' leaders that protectionist measures being taken by some developed countries are damaging the global trade order.

CURRENCY NEWS: China yuan tad higher against greenback on Friday. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate at 6.8747 per dollar, 31 bps or 0.05 percent firmer than the previous fix of 6.8778. In the spot market, onshore yuan opened at 6.8730 per dollar and was changing hands at 6.8740 at midday, 38 pips firmer than the previous late session close.

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