Shares in China rebounded on
Tuesday after securities regulator pledged to enhance market
liquidity, but comments from U.S. President Donald Trump that
new tariffs on China are "waiting to go if we can't make a deal"
underscored market uncertainty over trade.
** The CSI300 index ended 1.1 percent higher at
3,110.26 points after falling 3 percent on Monday, while the
Shanghai Composite Index closed up 1 percent at 2,568.05
points after Monday's 2.2 percent drop.
** Both indexes reversed early losses that had seen the Shanghai
Composite down as much as 0.8 percent and the CSI300 down as
much as 0.85 percent. But fragile sentiment also trimmed gains:
The Shanghai Composite and CSI300 had risen as much as 1.76
percent and 2.27 percent, respectively.
** China's securities regulator said Tuesday that it would
enhance market liquidity, and encourage share buybacks and
mergers and acquisitions by listed firms, the latest in a string
of official statements aimed at boosting markets.
** But adding to woes over global trade, the United States is
preparing to announce tariffs on all remaining Chinese imports
by early December if talks next month between presidents Donald
Trump and Xi Jinping fail to ease the trade war, Bloomberg
reported on Monday.
** In an interview, Trump said he thinks there will be "a great
deal" with China on trade, but warned that he has billions of
dollars worth of new tariffs ready to go if a deal isn't
possible.
** "There is no real relationship" between Trump's most recent
comments and Tuesday's rally, said Cao Xuefeng, an analyst at
Huaxi Securities. "At this point the market is numb" to such
news, he added.
** "There were two reasons for the early falls: One was the
significant weakening of the yuan's daily midpoint, and the
other was the threat of more U.S. tariffs," said Cao. He said
that the statement from the securities regulator and a slight
strengthening of the offshore yuan helped to drive the day's
rally.
** The financial sector sub-index ended higher by
2.18 percent, the consumer staples sector closed down 1.81
percent, the real estate index finished up 2.89 percent and the
healthcare sub-index fell 1.68 percent.
** The Shanghai SE50 index, an index tracking the 50
most representative sector leaders in Shanghai and dubbed
China's "Nifty 50", gained 1.09 percent, but some analysts
forecast possible weakness ahead.
** "Since September, many indexes representing small and
medium-sized enterprises have broken lower, and the Shanghai
Composite and SCI have followed them down," SDIC Essence Futures
said in a note. "The SSE50 index still remains rangebound, but
considering the bleak economic situation and market sentiment,
the likelihood of the SSE50 also breaking lower is significant."
** The SSE50 is down 15.55 percent for the year, compared to a
22.35 percent drop for the Shanghai Composite.
** Auto manufacturers jumped after a report that China's top
economic planner is proposing a 50 percent cut to car purchase
taxes. Shanghai-listed shares of Great Wall Motor Co
ended 5.52 percent higher and SAIC Motor Corp Ltd
gained 1.22 percent.
** The smaller Shenzhen index ended up 0.94 percent and
the start-up board ChiNext Composite index was
higher by 0.757 percent.
** Around the region, MSCI's Asia ex-Japan stock index
was firmer by 0.32 percent, while Japan's Nikkei
index closed up 1.45 percent.** The yuan was quoted at 6.9688 per U.S. dollar,
slightly weaker than the previous close of 6.962. The currency
finished its onshore trading session Monday at its weakest level
in more than a decade.
** On Tuesday, traders said that they saw major state-owned
Chinese banks swapping yuan for dollars in forwards in what they
said was likely a move to stockpile dollars for future use in
supporting the yuan.
(Reporting by Andrew Galbraith; Editing by Rashmi Aich)
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)