China Stocks fall on profit booking

Mainland China equity market finished session lower on Tuesday, 14 January 2020, as investors locked in profits from a recent rally underpinned by optimism ahead of planned signing of a preliminary Sino-U.S. trade deal and after key data showed signs of moderate stabilization in the world's second-largest economy. At closing bell, the benchmark Shanghai Composite Index declined 0.28%, or 8.75 points, to 3,106.82. The Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 0.23%, or 4.23 points, to 1,818.13. The blue-chip CSI300 index was down 0.34%, or 14.10 points, to 4,189.89.

The U.S. President Donald Trump and Chinese officials are set to sign the long-awaited phase one trade deal between the two countries on Wednesday, 15 January 2020, in Washington to ease the 18-month trade war. The Trump administration has invited at least 200 people to the White House for the ceremony. China's chief trade negotiator, Vice Premier Liu He, and a delegation are slated Wednesday to sign the so-called phase one trade deal in Washington. The deal will involve some tariff relief, increased Chinese purchases of U.S. agricultural goods and changes to intellectual property and technology rules.

On Monday, the U.S. removed China from a list of countries considered currency manipulators, the Treasury Department announced.

China's General Administration of Customs releases December 2019 trade data on Tuesday, showing China's dollar-denominated exports and imports were both higher in December, signalling a modest recovery in demand as a preliminary trade deal with the United States raised hopes that a prolonged tariff war will be de-escalated..

In December, dollar-denominated exports rose 7.6% on-year, against a 1.3% drop in November, while imports were 16.3% higher than year ago. As a result, December trade surplus was $46.79 billion. In December China's trade surplus with the U.S. was $23.18 billion down from $24.6 billion in November. In yuan terms, 2019 exports rose 5% from a year ago while imports 1.6% in the same period. China recorded a trade surplus of 2.92 trillion yuan ($423.6 billion) in 2019.

CURRENCY NEWS: The Chinese yuan jumped today amid signs of goodwill between China and the United States after news that the U.S. will no longer label China as a currency manipulator and as the world's two biggest economies prepared to sign a truce in their bitter trade war. By afternoon the yuan was 0.3% firmer at 6.8740 per dollar.

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