July 29, 2019 / 7:52 AM / 4 months ago

China stocks dip, expectations low for trade talks, STAR Market rallies

SHANGHAI, July 29 (Reuters) - China stocks slipped in thin trading on Monday as investors held low expectations that U.S. and Chinese negotiators meeting in Shanghai will bring a swift end to a damaging tariff war and soft data has fuelled concerns over an economic slowdown.

** The blue-chip CSI300 index fell 0.1%, to 3,854.27 points, while the Shanghai Composite Index also shed 0.1% to 2,941.01 points.

** China’s industrial profits have been softening since the second half of 2018 as the economy slowed and the U.S.-China trade dispute escalated, with many industrial firms putting off business decisions and scaling back manufacturing investment.

** U.S. and Chinese trade negotiators will meet in Shanghai this week for their first in-person talks since a G20 truce last month, but expectations are low for a breakthrough.

** Investors were cautious as they counted down to a likely cut in U.S. interest rates this week with much riding on whether or not the Federal Reserve signals are in the pipeline.

** Chances are small for China to follow suit if the Fed does cut rates, said Pan Jing, analyst with Great Wall Securities.

** Stocks rally across the board on China’s newly launched Nasdaq-style STAR Market.

** All 25 STAR-listed firms posted gains, led by Beijing Worldia Diamond Tools, which surged the maximum allowed 20% to a record high.

** Allowing good “money-making effect” on the STAR Market in its initial stage will be a focus of Beijing’s policies, while preventing a slump in the main board will also be one of the government’s targets to maintain stability (in the markets), Tebon Securities noted in report.

** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.53%, while Japan’s Nikkei index closed down 0.19%.

** At 07:23 GMT, the yuan was quoted at 6.8884 per U.S. dollar, 0.12% weaker than the previous close of 6.88.

** The largest percentage gainers in the main Shanghai Composite index were Nanjing OLO Home Furnishing Co Ltd , up 10.02%, followed by Zhejiang Starry Pharmaceutical Co Ltd, gaining 10.01% and Tanyuan Technology Co Ltd, up by 9.99%.

** The largest percentage losses in the Shanghai index were FUREN Group Pharmaceutical Co Ltd down 10.05%, followed by BOMESC Offshore Engineering Co Ltd losing 9.66% and Shaanxi Construction Machinery Co Ltd down by 7.47%.

** About 12.80 billion shares were traded on the Shanghai exchange, roughly 70.9% of the market’s 30-day moving average of 18.06 billion shares a day. The volume in the previous trading session was 13.93 billion.

** As of 07:24 GMT, China’s A-shares were trading at a premium of 29.32% over the Hong Kong-listed H-shares. (Reporting by Shanghai Newsroom; Editing by Simon Cameron-Moore)

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