China Stocks mixed after weak exports data

The Mainland China equity market closed mixed on Monday, 09 December 2019, as risk sentiments muted after customs data showed China's exports declined in November for the fourth consecutive month due to the prolonged Sino-U.S. trade war. At closing bell, the benchmark Shanghai Composite Index inclined 0.08%, or 2.46 points, to 2,914.48. The Shenzhen Composite Index, which tracks stocks on China's second exchange, edged up 0.01%, or 0.18 point, to 1,640.51. The blue-chip CSI300 index eased 0.18%, or 6.94 points, to 3,895.45.

Data from the General Administration of Customs showed on Sunday that China's exports were down by 1.1% in the last month of the year, after a drop of 0.9% in October on slowing global demand. Imports were up 0.3% from the year earlier, after October's 6.4% decline. China's trade surplus for November fell to $US38.73 billion, compared with $US42.81 billion surplus recorded in October. The figure for November 2018 was $US35.5 billion. Over the first 11 months of the year, China's Customs Administration estimated that the total value of China's exports and imports rose 2.4% to $US4.14 trillion.

 

China's trade surplus with the United States for November fell $US24.60 billion from the previous month's surplus of $US26.45 billion. The Customs Administration said China's total trade with the United States fell 15.2% for the first 11 months of 2019, with exports dropping 12.5% and imports slipping 23.3%. But exports to the EU rose 4.5% in the year through November, while imports rose 0.3%. Exports to Asean countries rose 11.5% during the month and imports rose 2.8%.

The latest print on Chinese trade comes as Beijing remains embroiled in a trade war with Washington. Both parties aim to reach a phase one trade deal that has remained elusive ahead of a closely-watched date of Dec. 15, when additional tariffs on Chinese exports to the U.S. are set to kick in.

The 17-month long trade dispute has heightened the risks of a global recession and fuelled speculation that China's policymakers could unleash more stimulus, as growth in the world's second-largest economy cooled to nearly 30-year lows.

Investors also got some encouraging news on the U.S.-China trade front, with Beijing saying Friday that it is waiving punitive tariffs on U.S. soybeans and pork as negotiations for a trade deal continue. Also, Trump said on last Thursday that the two countries were inching closer to a trade deal. Both sides have less than 6 days to go before Washington is poised to impose even more tariffs on Chinese goods. Tariffs on another $156 billion in Chinese goods are set to go into effect on Dec. 15.

CURRENCY NEWS: China's yuan was little changed against the dollar after the People's Bank of China (PBOC) set softer mid-point fixing and as investor caution about developments in the Sino-U.S. trade dispute. Prior to the open, the People's Bank of China set the midpoint rate CNY=PBOC at 7.0405 per dollar, 22 pips weaker than the previous fix of 7.0383. In the spot market, onshore yuan CNY=CFXS opened at 7.0343 per dollar and was changing hands at 7.0352 at midday, 2 pips weaker than the previous late session close.

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