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China Market edges higher ahead of Fed meeting

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The Mainland China equity market closed slight higher on Tuesday, 18 June 2019, as market participants exercised caution ahead of the U. S. Federal Reserve's two-day policy meeting starting later in the global day and the highly-anticipated meeting between Presidents Xi Jinping and Donald Trump at the G20 summit in Japan at the end of this month. At closing bell, the benchmark Shanghai Composite Index rose 0.1%, or 2.54 points, to 2,890.16. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 0.2%, or 2.44 points, to 1,504.57. The blue-chip CSI300 index inclined 0.35%, or 12.80 point, to 3,667.62.

The Fed, facing fresh demands by US President Donald Trump to cut interest rates, begins a two-day meeting later on Tuesday. The central bank is expected to leave borrowing costs unchanged this time but possibly lay the groundwork for a rate cut later this year. Focus is now on how close the Fed could be to cutting interest rates amid the raging US-China trade war, signs of the economy losing steam and pressure by President Trump to ease policy.

Meanwhile, on the U. S.-China trade front, hundreds of businesses stateside are attempting to send a message to U.

S. President Donald Trump's administration to discourage them from increasing tariffs on China. That comes as U. S. Commerce Secretary Wilbur Ross says Trump is perfectly happy to impose new tariffs on China if the two economic powerhouses don't make a deal.

Investors are closely watching to see if U. S. President Donald Trump and his Chinese counterpart Xi Jinping will meet on the sidelines of the summit to discuss trade, after negotiations broke down last month and both sides raised tariffs on each others' goods. Trump is preparing to extend tariffs on another $300 billion worth of Chinese imports and has said he would decide whether to trigger them after talks with Xi.

CURRENCY NEWS: China yuan was virtually flat against greenback on Tuesday, as the central bank kept its morning guidance rate largely steady. Prior to the market opening, the People's Bank of China (PBOC) set the midpoint rate at 6.8942 per dollar, 2 pips firmer than the previous fix of 6.8940. In the spot market, onshore yuan opened at 6.9255 per dollar and was changing hands at 6.9267 at around late afternoon, 9 pips softer the previous late session close.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, June 18 2019. 13:27 IST