Key Moments:
- The Shenzhen Component index plummeted by 0.86% on Tuesday.
- Equities tied to the CSI 300 Index also slipped by 0.5% to 3.865.4652, while the Shanghai Composite Index fell 0.44% to 3,384.8163.
- US officials report progress on technology and rare earth export disputes following Monday’s discussions between the US and China.
Benchmark Indexes End Lower
Chinese equities closed in negative territory on Tuesday as investors kept a close watch on the ongoing US-China trade negotiations in London. The tech-heavy Shenzhen Component Index suffered the worst declines as it ended the session 0.86% lower and fell to 10,162.1811.
Meanwhile, the Shanghai Composite declined 0.44% to finish at 3,384.8163, with Dashang Co LTD being the worst performer with a decline of 16%, while HOB Biotech Group Crop climbed to the top of the index to close 20% higher. The blue-chip CSI 300 also dropped 0.51% by the time markets closed.
Progress Reported in US-China Discussions
The second day of trade talks between Washington and Beijing resumed in London. According to US officials, the Monday session yielded progress on navigating points of contention related to technology and rare earth exports.
Speculation has surfaced that certain export-related policies could be eased if China offers concessions on rare earth materials. However, current expectations point to Washington excluding artificial intelligence chips from any such potential deals.
Economists Signal Renewed Confidence Despite Mixed Economic Data
June figures from the Yicai Chief Economists Confidence Index pointed to improving sentiment toward the Chinese economy. The index climbed to 50.5 in June, landing higher than the 49.84 reported in May. Drawing on insights from 14 chief economists residing in China, the survey attributed the uptick to improved trade relations, including recent temporary tariff reductions.
The improvement follows recent economic indicators that painted a mixed picture of China’s economy. The country’s Consumer Price Index (CPI) registered a smaller-than-anticipated annual decline of 0.1%. The figure was received positively, as it indicated a softer drop than what had been expected. However, this data was accompanied by news of export growth slowing to 4.8% last month. US exports, in particular, declined by over 30%.
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