Chinese stocks softened for the week as traders stayed cautious ahead of a widely anticipated meeting between President Trump and his Chinese counterpart Xi Jinping at the Group of 20 summit.
The benchmark Shanghai Composite Index declined 0.8% and the large-cap CSI 300 Index, which tracks blue chips listed on the Shanghai and Shenzhen exchanges, shed 0.2%.
However, both indexes rose for the month amid positive signals on trade earlier in June. The Shanghai benchmark rose 2.8% and the CSI 300 Index gained 5.4% in June as investors grew more optimistic that the G-20 meeting between both leaders would, at a minimum, lead to the resumption of trade talks that broke down last month.
Hopes for a temporary détente were supported on Thursday after the South China Morning Post reported that the U.S. and China have agreed to a tentative truce that would forestall the next round of punitive U.S. tariffs on Chinese imports.
Details of the agreement were being prepared for press releases ahead of Saturday’s meeting between Xi and Trump on the sidelines of the G-20 summit, said the paper, citing unnamed sources.
However, in recent weeks China’s state-run media has ramped up efforts to bolster confidence in the country’s economy and drum up nationalist sentiment, which some analysts viewed as an attempt to dampen expectations of an imminent breakthrough.
Analysts believe that a de-escalation in the U.S.-China trade battle won’t occur anytime soon and that both sides will undergo a period of economic pain as they reconsider their positions.
Source - Galt & Taggart
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