Chinese stocks surge after US-China trade deal confirmed
Chinese stocks rose on June 11, bolstered by signs of easing trade tensions between the United States and China after a two-day meeting in London.
The meeting saw both countries agree on a preliminary framework to de-escalate trade conflicts, which helped restore investor confidence.
As reported by Bloomberg, the onshore CSI 300 Index, which tracks the largest companies on the Shanghai and Shenzhen stock exchanges, gained 1%, marking its most significant rise in nearly a month.
Meanwhile, a measure of Chinese stocks listed in Hong Kong advanced by 0.9%, reaching its highest point since March.
The market rally followed the announcement of an agreement between the US and China, which focused on the implementation of consensus reached earlier in Geneva.
Progress made in the trade talks, coupled with positive rhetoric from both sides, has raised hopes that the dispute between the two largest economies in the world could be heading towards resolution.
The agreement also addresses China’s export restrictions on rare earth minerals and magnets, which have been a point of contention between the two nations.
US Commerce Secretary Howard Lutnick confirmed the framework at the conclusion of the London talks, highlighting its potential to put the trade truce back on track.
US and Chinese officials agreed on a framework to put their trade truce back on track and resolve China's export restrictions on rare earth minerals and magnets, US Commerce Secretary Howard Lutnick said https://t.co/VD241s4aGM pic.twitter.com/l0AVgwVqFW
However, market reactions were largely muted, with S&P 500 futures showing little movement, and only modest fluctuations in the offshore yuan.
Chris Weston, head of research at Pepperstone, noted that the lack of significant market reaction suggested that the outcome of the talks had already been priced in.
The Daily Fix – Big trading levels in full view
US-China talks continue to progress well – superficially, at least – with talks set to spill over for a third day - a factor that keeps the bid in risk and the sellers feeling they may be able to execute orders at higher/better…“The devil will be in the details,” Weston said, emphasising the importance of how rare earths exports to the US are handled and the subsequent access for US-produced chips to China.
Despite the limited immediate impact on market movements, the outlook for a resolution in the trade conflict has provided Chinese and Hong Kong stocks with a positive boost ahead of further details from the ongoing trade talks.