China Market gains on trade deal hopes

Headline indices of the Mainland China equity market advanced on Tuesday, 12 March 2019, as U.S.-Sino trade talks appeared to make further progress. However, market gains capped on worries about economic headwinds at home. At closing bell, the benchmark Shanghai Composite Index advanced 1.1%, or 33.32 points, to 3,060.31. The Shenzhen Composite Index, which tracks stocks on China's second exchange, rose 1.7%, or 28 points, to 1,695.81. The blue-chip CSI300 index climbed 0.7%, or 25.40 points, to 3,755.35.

On the trade front, Chinese Vice Premier Liu He held a telephone call with US Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer on key issues in their trade talks on Tuesday, and set the next steps in "working arrangements".

Investors are awaiting news out of U.S.-China trade negotiations after China's central bank governor said Beijing and Washington are in general agreement on many crucial issues and have held meaningful discussions on foreign exchange.

China will release a slew of economic data on Thursday, including industrial output, retail sales and fixed-asset investment for the combined January and February. The National People's Congress is set to wrap up with a speech on Friday from Premier Li Keqiang. Data on Monday showed China's automobile sales fell 13.8% in February from the same month a year earlier, marking the eighth consecutive month of decline.

CURRENCY NEWS: China's yuan strengthened against the U.S. dollar on Tuesday. The People's Bank of China (PBOC) set the midpoint rate at 6.7128 per dollar prior to market open, 74 pips or 0.11 percent firmer than the previous fix of 6.7202.

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