China Market gains on Sino-U.S. trade hopes

The Mainland China equity market advanced on Wednesday, 19 June 2019, as risk sentiments strengthened on hopes that U.S. and Chinese leaders would revive stalled trade talks after Beijing and Washington said Presidents Xi Jinping and Donald Trump will meet at the G-20 summit next week. Around late afternoon, the benchmark Shanghai Composite Index rose 1.1%, or 31.56 points, to 2,921.72. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 1.7%, or 25.10 points, to 1,529.67. The blue-chip CSI300 index inclined 1.5%, or 54 point, to 3,721.60.

U.S. President Donald Trump tweeted that he had "very good" talks with China's President Xi Jinping and that the two leaders would have an "extended meeting" at the G20 summit in Japan later this month. The summit will start on June 28. A short time later, Xi echoed Trump's upbeat tone, saying that China and the United States should push for "positive outcomes" at the summit of world leaders, in order "to inject confidence and vitality into the global market."

Trade tensions between the two economic powerhouses had worsened in recent weeks with both raising tariffs on billions of dollars worth of their goods. Trump had also previously suggested that additional levies could be imposed on more Chinese imports.

Traders await the outcome of the US Federal Reserve's meeting later on Wednesday, with the central bank widely expected to join its European counterpart in striking a dovish tone. Traders also cautious after the news report said that the OPEC and group of oil producers is close to agreeing their next meeting to discuss output policy.

CURRENCY NEWS: China yuan was strengthened against greenback on Wednesday, as the central bank kept its stronger guidance rate. Prior to the market opening, the People's Bank of China (PBOC) set the midpoint rate at 6.8893 per dollar, 49 bps firmer than the previous fix of 6.8942.

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