Tuesday , June 18 2019

China stocks rebound with biggest gain since 2016


Chinese large cap stocks climbed the most in two years, bouncing back from a bruising run of losses in the lead up to the imposition of US tariffs from July 6. The yuan also rose after retreating for four weeks straight.
The Shanghai Composite Index jumped 2.5 percent, the most since May 2016, following seven weekly declines in a row.
The SSE 50 Index of the largest mainland-listed stocks climbed 2.9 percent, its biggest gain since August 2016; the CSI 300 gauge added 2.8 percent, also the most since August 2016. The Hang Seng Index advanced 1.3 percent in Hong Kong to the highest close this month. The yuan, one of the weakest currencies against the dollar over the past month, rose 0.5 percent, in line for its biggest increase against the greenback since April 10.
“Market sentiment improved on a temporary relief of concerns on the China-US trade spat,” said Tommy Xie, economist at Oversea-Chinese Banking Corp.
“The trade war didn’t worsen over the weekend and investors are expecting a relatively quiet week ahead on the trade front as Trump will be tied up with his Europe visit.”
China’s Finance Ministry responded to Washington’s imposition of tariffs, saying the US had ignited the largest trade war in history and accusing the Trump administration of bullying. It also said China would continue to deepen reform, open up its markets and create a “favourable business environment for companies from all over the world operating in China.”
Chinese stocks are still among the world’s worst performers this year. In addition to the trade war threat, investors have been troubled by a domestic deleveraging campaign weighing on liquidity, signs of an economic slowdown, and a weaker currency.
The Shanghai index is in a bear market after dropping more than 20 percent from its January high.
Data on Monday showed China’s foreign-exchange reserves last month rose for the first time since March, reaching $3.112 trillion as the yuan slid 3.3 percent.
The yuan strengthened to 6.6170 versus the dollar on Monday, while the Bloomberg dollar index fell 0.3 percent following a 0.4 percent loss Friday.

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