INSUBCONTINENT EXCLUSIVE:
Shares in China rebounded on Tuesday after securities regulator pledged to enhance market liquidity, but comments from U.S
President Donald Trump that new tariffs on China are "waiting to go if we can't make a deal" underscored market uncertainty over trade.
The
CSI300 index ended 1.1 per cent higher at 3,110.26 points after falling 3 per cent on Monday, while the Shanghai Composite Index closed up 1
per cent at 2,568.05 points after Monday's 2.2 per cent drop
Both indexes reversed early losses that had seen the Shanghai Composite down as much as 0.8 per cent and the CSI300 down as much as 0.85
But fragile sentiment also trimmed gains: The Shanghai Composite and CSI300 had risen as much as 1.76 per cent and 2.27 per cent,
China's securities regulator said Tuesday that it would enhance market liquidity, and encourage share buybacks and mergers and acquisitions
by listed firms, the latest in a string of official statements aimed at boosting markets
But adding to woes over global trade, the United States is preparing to announce tariffs on all remaining Chinese imports by early December
if talks next month between presidents Donald Trump and Xi Jinping fail to ease the trade war, Bloomberg reported on Monday
In an interview, Trump said he thinks there will be "a great deal" with China on trade, but warned that he has billions of dollars worth of
new tariffs ready to go if a deal isn't possible
"There is no real relationship" between Trump's most recent comments and Tuesday's rally, said Cao Xuefeng, an analyst at Huaxi Securities
"At this point the market is numb" to such news, he added
"There were two reasons for the early falls: One was the significant weakening of the yuan's daily midpoint, and the other was the threat
He said that the statement from the securities regulator and a slight strengthening of the offshore yuan helped to drive the day's rally
The financial sector sub-index ended higher by 2.18 per cent, the consumer staples sector closed down 1.81 per cent, the real estate index
finished up 2.89 per cent and the healthcare sub-index fell 1.68 per cent
The Shanghai SE50 index, an index tracking the 50 most representative sector leaders in Shanghai and dubbed China's "Nifty 50", gained 1.09
per cent, but some analysts forecast possible weakness ahead
"Since September, many indexes representing small and medium-sized enterprises have broken lower, and the Shanghai Composite and SCI have
followed them down," SDIC Essence Futures said in a note
"The SSE50 index still remains rangebound, but considering the bleak economic situation and market sentiment, the likelihood of the SSE50
also breaking lower is significant."
The SSE50 is down 15.55 per cent for the year, compared to a 22.35 per cent drop for the Shanghai
Auto manufacturers jumped after a report that China's top economic planner is proposing a 50 per cent cut to car purchase taxes
Shanghai-listed shares of Great Wall Motor Co ended 5.52 per cent higher and SAIC Motor Corp Ltd gained 1.22 per cent
The smaller Shenzhen index ended up 0.94 per cent and the start-up board ChiNext Composite index was higher by 0.757 per cent
Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.32 per cent, while Japan's Nikkei index closed up 1.45 per cent.
The
yuan was quoted at 6.9688 per U.S
dollar, slightly weaker than the previous close of 6.962
The currency finished its onshore trading session Monday at its weakest level in more than a decade
On Tuesday, traders said that they saw major state-owned Chinese banks swapping yuan for dollars in forwards in what they said was likely a
move to stockpile dollars for future use in supporting the yuan.
