The Mainland China equity market closed down on Wednesday, 03 July 2019, as enthusiasm following the U. S.-China summit at weekend lost steam after Washington's threat of tariffs on additional European goods. Global growth concerns also weighed on investor confidence, with South Korea the latest trade-reliant economy to cut its economic growth and export targets, a day after weaker factory readings worldwide. At closing bell, the benchmark Shanghai Composite Index was down 0.94%, or 28.68 points, to 3,015.26. The Shenzhen Composite Index, which tracks stocks on China's second exchange, declined 1.2%, or 19.11 points, to 1,600.02. The blue-chip CSI300 index shed 1.1%, or 43.64 points, to 3,893.53.
Market participants initial enthusiasm over the latest U. S.-China trade truce was overtaken by fresh concerns over Washington's threat of tariffs on additional European goods particularly in a long-running dispute over aircraft subsidies. The United States proposed new tariffs on $4 billion worth of goods imported from the European Union. The newly proposed tariffs promise to add to the pain, as the EU economy is heavily driven by exports.
The new wave of proposed duties comes amid a 15-year dispute at the World Trade Organization over aircraft subsidies given to U. S. aerospace manufacturer Boeing and its European rival, Airbus. In a speech given Tuesday, Bank of England Governor Mark Carney warned that existing trade tensions could shipwreck the global economy or prove to be a tempest in a teacup.
The U. S.
Commerce Department also said Tuesday that tariffs would be imposed on steel from Vietnam that was originally produced in South Korea or Taiwan, saying that those had circumvented U. S. anti-dumping and anti-subsidy duties.
On the U. S-China front, U. S. President Donald Trump and Chinese President Xi Jinping agreed not to impose new tariffs on each other's goods after the two met at the G-20 summit in Osaka, Japan, but existing tariffs that have disrupted global supply chains are unlikely to be lifted any time soon.
The United States and China agreed on Saturday to restart trade talks after President Donald Trump offered concessions including no new tariffs and an easing of restrictions on tech company Huawei in order to reduce tensions with Beijing. .
ECONOMIC NEWS: China Caixin Private Sector Marginally Higher In June -- China's private sector expanded marginally in June despite contraction in manufacturing, survey data from IHS Markit showed Wednesday. The Caixin composite output index fell to 50.6 in June from 51.5 in May. However, a score above 50 indicates expansion. The reading signaled the weakest growth since last October. The services Purchasing Managers' Index dropped more-than-expected to 52.0 in June from 52.7 in the previous month. The expected reading was 52.6.
CURRENCY NEWS: China yuan eased against greenback on Wednesday, as optimism over the latest U. S.-China trade ceasefire began to wane. Prior to the market opening on Wednesday, the People's Bank of China (PBOC) set the midpoint rate at 6.864 per dollar, 127 pips or 0.19 percent weaker than the previous fix of 6.8513. In the spot market, the yuan opened at 6.8830 per dollar, fell to a low of 6.8920 and was changing hands at 6.8826 at midday, 88 pips weaker than the previous late session close.
Powered by Capital Market - Live News
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)