HONG KONG: China stocks closed marginally lower on Tuesday after U.S. President Donald Trump seemed to quash hopes of a trade truce with Beijing, while investors remained on the sidelines amid a slowdown in global growth.
The Shanghai Composite index ended flat at 2,574.68, and the blue-chip CSI300 index closed 0.1 percent lower, after trading higher earlier in the session.
Small losses were seen across the board. CSI300’s financial sector sub-index closed 0.3 percent lower, the consumer staples sector ended down 0.5 percent and the real estate index closed 0.8 percent weaker.
Sentiments were dampened as the White House appeared hawkish ahead of the scheduled talk between U.S. President Donald Trump and Chinese President Xi Jinping at the G20 summit this week.
In an interview with the Wall Street Journal, Trump said he expects to move ahead with raising tariffs on $200 billion in Chinese imports to 25 percent from 10 percent currently.
Trump said it was “highly unlikely” he would accept China’s request to hold off on the increase, planned for Jan. 1.
The ongoing trade tensions appear to be having an impact on China’s trade patterns. The country’s imports of soybeans from Brazil doubled year-on-year in October, according to figures published on Monday.
China’s soybean imports from Russia also shot up 60 percent year-on-year. Most investors are cautious as optimism over the G20 summit wanes, said Zhang Qi, a Shanghai-based analyst, Haitong Securities. ”Volume has come down quite a bit,” he said.
About 12.4 billion shares were traded on the Shanghai exchange. The volume in the previous trading session was 13.4 billion shares, and 19.1 billion in the session before that.
The smaller Shenzhen index ended up 0.4 percent and the start-up board ChiNext Composite index was higher by 0.8 percent.
Worries over economic growth continued to hang over the market. Profit growth at China’s industrial firms slowed down for a sixth straight month in October as factory prices and the pace of sales increases softened, according to official data released on Tuesday.
Investors, however, are paying less attention to this set of data, since ”there were hints” of a growth slowdown in China prior to its release, said Zhang. Instead, the market will be watching the speeches by the Fed chairman and his deputy this week, according to Linus Yip, chief strategist at First Shanghai Securities in Hong Kong.
“People will want to know whether the Fed will slow down its plans to hike rates” given that tightening in the United States has been the main source of pressure on emerging markets, including China, he said.
The largest percentage gainers in the main Shanghai Composite index were Guangxi Guidong Electric Power Co Ltd, which closed up 10.1 percent, followed by ARTS Group Co Ltd, which ended 10 percent firmer and Eastern Communications Co Ltd, which closed 10 percent higher.
The largest percentage losses in the Shanghai index were Chongqing Fuling Electric Power Industrial Co Ltd which closed down 5.1 percent, followed by Shandong Tyan Home Co Ltd, which ended down 5 percent, and Beihai Gofar Marine Biological Industry Co Ltd, which closed down 4.9 percent. - Reuters
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