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China Market recovers on trade deal hopes

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The Mainland China equity market closed marginal higher after recouping losses late afternoon on Thursday, 07 November 2019, thanks to reports that China and the US have agreed on a plan to roll back additional tariffs in phases, a potentially key development as the world's two largest economies search for a way to end their trade war. At closing bell, the benchmark Shanghai Composite Index edged up 0.00%, or 0.12 point, to 2,978.71. The Shenzhen Composite Index, which tracks stocks on China's second exchange, rose 0.64%, or 10.55 points, to 1,651.77. The blue-chip CSI300 index added 0.18%, or 7 points, to 3,991.88 .

Market recovered after news reports that China and US have agreed to proportionally roll back tariffs on each other's goods in phases. China and the United States have agreed to cancel in phases the tariffs imposed during their months-long trade war, the Chinese commerce ministry said on Thursday, without specifying a timetable. An interim U. S.-China trade deal is widely expected to include a U.

S. pledge to scrap tariffs scheduled for Dec. 15 on about $156 billion worth of Chinese imports, including cell phones, laptop computers and toys. Tariff cancellation was an important condition for any agreement, ministry spokesman Gao Feng said, adding that both must simultaneously cancel some tariffs on each other's goods to reach a "phase one" trade deal. "The trade war started with tariffs, and should end with the cancellation of tariffs," Gao told a regular news briefing. The proportion of tariffs cancelled for both sides to reach a "phase one" deal must be the same, but the number to be cancelled can be negotiated, he added, without elaborating.

The three heavyweights on the index - Industrial and Commercial Bank of China, Kweichow Moutai and the Agricultural Bank of China - were mixed. ICBC fell 0.5% to 5.95 yuan, Kweichow Moutai rose 0.7% to 1,201.37 yuan, and the Agricultural Bank of China declined 0.6% to 3.30 yuan.

Gauges tracking sectors traded in the mainland markets showed that blockchain-linked and 5G-related stocks gained, 1.9% and 0.9%, respectively, while gold-related stocks declined 0.6%. Jiangsu Hengrui Medicine, a stock heavily traded on the Stock Connect, fell 0.7% to 90.58 yuan. Luxshare Precision Industry - the main assembler of AirPods - rose 0.44% to 34.39 yuan.

CURRENCY NEWS: China's yuan appreciated against greenback on Thursday, after the central bank set stronger mid-point fixing and amid hopes for a phase one U. S.-China trade deal. Prior to market opening, the People's Bank of China set the midpoint for the yuan at 7.0008, stronger by 72 bps from 7.008 set previous day.

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

First Published: Thu, November 07 2019. 16:30 IST