A Chinese trade delegation abruptly canceled a visit on Friday to US farms in Montana and Nebraska, cutting short their US trip, fueling pessimism about the prospect of a trade truce between the world's two largest economies. The trip was to prepare for further negotiations between senior officials next month. Investors had earlier expected a potential cooling of US-China trade tensions as the two sides gear up for talks. But the sudden change in the trip dampened investor hopes for a breakthrough in the negotiations. Earlier in the day, President Donald Trump had said the United States was looking for a "complete deal" with China and not a partial one. Lack of progress in Sino-U.S. trade talks prompted investors to sell shares.
Over the weekend, the U.S. Trade Representative's office issued a brief statement characterizing the two days of talks with China as "productive." It added that a principal-level trade meeting in Washington would take place in October, as previously planned. China's Commerce Ministry, in a brief statement, described the talks as "constructive", and said they had also had a good discussion on "detailed arrangements" for the high-level talks in October. Additionally, the United States removed tariffs from more than 400 Chinese products in response to requests from U.S. companies. Despite the improved tone, markets still remain unconvinced about the possibility of deal soon.
Nearly 80% of listed stocks were down, and all sectors were negative. Just five companies rose by the daily limit of 10%, as investors were downbeat over a lack of progress in the US-China trade war following talks over the weekend.
CURRENCY NEWS: The central bank set the daily reference rate at 7.0734.
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