STOCKS listed in Shanghai and Shenzhen yesterday reclaimed some of the heavy losses from the previous session’s plunge, as upbeat comments from domestic media and a burst of share purchase plans by listed companies soothed immediate panic over a Sino-U.S. trade war. However, investors remain wary about the longer-term sustainability of the rebound with the Shanghai Composite Index up only 0.3 percent, compared with Tuesday’s nearly 4 percent tumble, as some fear escalating trade frictions between China and the United States could hurt China’s economy. The trade talks between the world’s two biggest economies have shown a pattern of “one step forward, two steps back,” said Raymond Ma, portfolio manager of portfolio manager at Fidelity International. “Sino-U.S. trade frictions will continue to have wide-spread, negative impact on market sentiment, and could hurt earnings expectations.” The Shanghai Composite Index, which tumbled to a two-year low Tuesday, gained 0.3 percent to 2,915.73 points. The blue-chip CSI300 index rose 0.4 percent to 3,635.44 points. Yesterday’s rebound was led by sectors that are less vulnerable to trade friction, such as consumer and health care. Some signs of stability came after domestic media yesterday projected confidence in the country’s stock markets, while more than 30 listed firms announced share purchase plans by major shareholders. Yi Gang, governor of the People’s Bank of China, said China’s economy is well-placed to cope with external shocks. Gao Ting, head of China strategy at UBS Securities, said that the current tariff plans are likely to have a limited macro impact, unless tensions escalated further or protectionism grows in other economies. (SD-Agencies) |