China Stocks fall to near four-month lows

The Mainland China equity market closed near four-month lows on Thursday, 06 June 2019, as risk aversion selloff flared on concerns over the country's economic momentum amid ongoing US-China trade war. Meanwhile selloff pressure mounted after the International Monetary Fund on Wednesday cut its 2019 economic growth forecast for China to 6.2% on heightened uncertainty around trade frictions, citing that more monetary policy easing would be warranted if the Sino-U.S. trade war escalates. At closing bell, the benchmark Shanghai Composite Index declined 1.17%, or 33.62 points, to 2,827.80. The Shenzhen Composite Index, which tracks stocks on China's second exchange, was down 2.08%, or 31.07 points, to 1,453.70. The blue-chip CSI300 index fell 0.9%, or 32.42 points, to 3,564.68. China markets will be closed for Dragon Boat Festival on Friday.

Trump and his Chinese counterpart Xi Jinping are expected to make another attempt to find common ground and a potential solution to the trade war when they meet at the G20 summit in Japan later this month. Some US lawmakers are trying to pass legislation that would make it harder for Chinese students and scholars to work in the United States, citing security concerns as the trade war rages.

China and the United States are engaged in a fierce trade war, with clashes over Taiwan and the South China Sea exacerbating tensions.

The International Monetary Fund (IMF) cut its 2019 economic growth forecast for China to 6.2% on Wednesday on heightened uncertainty around trade frictions, saying more policy easing would be warranted if the Sino-US trade war escalates.

Telecommunications stocks declined as traders were profit taking from 5G-related stocks, after the rose earlier in the week. This came after Beijing issued 5G licenses to major telecom operators and embattled Huawei's orders were reported to have fallen sharply. Nanjing Huamai Technology and ZhongTongGuoMai Communication, which provide telecommunications equipment, and Jiangsu Lettall Electronics, which manufacturers electrical components, all plunged by over 9%.

Powered by Capital Market - Live News