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China Market falls on profit booking

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The Mainland China equity market closed down on Wednesday, 06 November 2019, snapping straight three sessions of winning streak, as investors elected to book profit on caution over developments on U. S.-China trade following reports Beijing wants Washington to lift punitive tariffs. At closing bell, the benchmark Shanghai Composite Index dropped 0.43%, or 12.97 points, to 2,978.60. The Shenzhen Composite Index, which tracks stocks on China's second exchange, fell 0.87%, or 14.38 points, to 1,641.23. The blue-chip CSI300 index shed 0.45%, or 17.93 points, to 3,984.88.

Investors continue to watch for more developments on U. S.-China trade as the two economic powerhouses work toward reaching a deal.

Beijing wants 15% tariffs imposed in September on $125 billion of Chinese imports removed as part of a truce in a trade war that threatens global growth, according to news reports. There was no sign whether President Donald Trump would agree, which raised the possibility of a new breakdown in negotiations.

Since the United States and China agreed to a "phase one" trade deal in October, the progress seemed to have stalled as it remains unclear when and where the two parties will sign the agreement. Still, there is good news that the United States is assessing current tariffs on Chinese imports as the parties work to finalize the "phase one" trade deal, according to officials. No decisions have been made beyond the previously announced tariff relief.

Beijing and Washington have been locked in a trade war for more than a year, with tariffs being slapped on billions of dollars worth of each other's goods. Recent data has shown that both economic powerhouses have suffered losses in the tens of billions of dollars from the trade fight.

China's central bank helped ease worries about a possible liquidity crunch by trimming its interest rate on a one-year loan by 0.05% to 3.25%.

CURRENCY NEWS: China's yuan appreciated against greenback on Wednesday, after the central bank set stronger mid-point fixing. Prior to market opening, the People's Bank of China set the midpoint for the yuan at 7.0080 per dollar its strongest since August 8. The onshore yuan was last at 7.0019, while its offshore counterpart traded at 7.0024.

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

First Published: Wed, November 06 2019. 17:39 IST
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