China stocks dither ahead of central bank signals

Chinese stocks were largely unchanged on Wednesday as the market awaits clues from policymakers at home and abroad this week on further support to shore up growth amid a protracted trade war between the world's two largest economies.

** At the close, the Shanghai Composite index was flat at 2,880.33 points. The blue-chip CSI300 index edged down 0.2%. ** CSI300's financial sector sub-index was lower by 0.2%, the consumer staples sector lost 0.6%, while the real estate index rose 0.1%. ** The smaller Shenzhen index and the start-up board ChiNext Composite index were weaker by 0.1% each. ** U.S. President Donald Trump toughened his trade rhetoric on Tuesday, saying he had to confront China even if it caused short-term harm to the U.S. economy because Beijing had been cheating Washington for decades. ** Markets across Asia are placing hopes on central banks to step in and boost lackluster economic growth, as central bankers gather in Jackson Hole later this week. ** Traders are betting for the Fed to deliver another 25 basis point cut next month, and the U.S. central bank releases minutes of its last policy-setting meeting later on Wednesday. ** The People's Bank of China lowered its new lending reference rate slightly on Tuesday and kicked off interest rate reforms designed to reduce corporate borrowing costs. ** Banking stocks are due to take a hit as interest margins narrow and it will take some time to determine if the reform will stop "high-risk assets like loans to small and micro enterprises being squeezed out (of the market)", said Chuancai Securities' analysts in a note on Wednesday. ** Kaiyuan Securities' analysts are betting on further policy support to hold up the stock market, saying in a note on Wednesday that "we can't rule out that, as we get closer to National Day (on October 1), the (country's) management will want to maintain stability". ** Around the region, MSCI's Asia ex-Japan stock index was flat, while Japan's Nikkei index closed down 0.3%. ** At 0703 GMT, the yuan was quoted at 7.0592 per U.S. dollar, pretty much unchanged from the previous close. ** So far this year, the Shanghai stock index is up 15.5% and the CSI300 has risen 25.6%. Shanghai stocks have declined by 1.8% this month. ** About 15.90 billion shares were traded on the Shanghai exchange. The volume in the previous trading session was 18.97 billion. ** As of 07:03 GMT, China's A-shares were trading at a premium of 29.84% over the Hong Kong-listed H-shares. ** The Shanghai stock index is below its 50-day moving average and above its 200-day moving average.

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