Headline indices of the Mainland China equity market closed lower on Monday, 13 May 2019, amid heightening concerns over a prolonged U. S.-China trade war after the United States and China failed to find a solution to their trade dispute in two days of ministerial negotiations in Washington through Friday. At closing bell, the benchmark Shanghai Composite Index dropped 1.21%, or 35.50 points, to 2,903.71. The Shenzhen Composite Index, which tracks stocks on China's second exchange, shed 1.08%, or 16.87 points, to 1,551.75. The blue-chip CSI300 index sank 1.65%, or 61.72 points, to 3,668.73.
The United States and China appeared at a deadlock over trade negotiations on Sunday as Washington demanded promises of concrete changes to Chinese law and Beijing said it would not swallow any bitter fruit that harmed its interests.
China's envoy to the trade talks, Vice Premier Liu He said before leaving Washington that Beijing would not compromise on matters of principle and that tariffs on Chinese exports to the U. S. should be lifted as a condition for striking a deal. But Liu downplayed the level of tensions, saying China could cope with the challenges posed by the trade dispute.
President Donald Trump said on Twitter over the weekend that We are right where we want to be with China. He accused China of ripping off America. The Trump administration said it was preparing to expand 25% tariffs to another $300 billion worth of Chinese goods, or practically all imports from China, after raising the import duty from 10%, with effect Friday.
The tariffs war has been hammering Chinese manufacturers and is an added drag on growth for the region.
With no signs of a quick solution in sight, investors continued to await Beijing's response to the higher tariffs. China has said it would adopt countermeasures, but has not yet spelled out what it will do.
Most of investors adopted a wait-and-see stance before the U. S. announced details about additional tariffs on all imports from China later Monday.
CURRENCY NEWS: China's yuan slumped against the U. S. dollar on Monday, inline with China's central bank softer midpoint fixing. Prior to the market open, the People's Bank of China (PBOC) lowered the official midpoint of the yuan's daily trading band to 6.7954 per dollar. That was 42 bps, or 0.06 percent, weaker than the previous fix of 6.7912 on Friday and the softest since Jan. 23. In the spot market, onshore yuan opened at 6.8459 per dollar and was changing hands at 6.8566 at midday, 366 bps away from the previous late session close. The offshore Chinese yuan fell to its lowest levels in more than four months at 6.88 to the dollar . It last stood down 0.4% at 6.872 per dollar.
Powered by Capital Market - Live News
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)