China Market rebounds 0.4%

Headline indices of the China share market finished session higher after recouping intraday losses on Tuesday, 3 July 2018, as unexpected commentary by the central bank stoked speculation that authorities are stepping up efforts to halt a rout. However, market gain was limited on caution ahead of July 6, when US tariffs on $34 billion worth of Chinese goods kick in. At the close of trade, the Shanghai Composite Index added 0.4%, or 11.33 points, to 2,786.89, after earlier plunging as much as 1.9%. The blue-chip CSI300 index rose 0.04%, or 1.32 points, to 3,409.28 points.

In the face of the early sell-off on Tuesday, China's state-controlled media kicked into gear, calling the fall in stocks an irrational overreaction and urging investors not to panic over the growing trade frictions.

 

Investor sentiment was cautious as markets continued to watch developments on the trade front. A looming July 6 deadline is set to see the U.S. impose a 25% tariff on $34 billion worth of Chinese goods from more than 800 product categories. China has also announced that it will retaliate with duties on the same value of U.S. products.

Banks and insurers led the equity rebound, which came after shares plumbed a new two-year low to approach levels last seen during panic selling in early 2016.

CURRENCY: The yuan fell to 6.7204 per dollar, its weakest since Aug. 7, 2017 and the first time it dropped below 6.7 since Aug. 9, 2017, before recovering to 6.6923 per dollar. The central bank earlier set the stage for the drop by putting the midpoint roughly in line with market expectations, at 6.6497 yuan per dollar, its weakest fixing in about 10 months.

Powered by Capital Market - Live News