March 20, 2019 / 7:44 AM / a month ago

China stocks flat ahead of Fed decision; trade outlook weighs

* Shanghai shares, blue-chips unchanged

* All eyes on Fed meeting, caution seen in global markets

* Conflicting reports on resumption of U.S.-China trade talks

HONG KONG, March 20 (Reuters) - Chinese stocks were little changed on Wednesday ahead of the Federal Reserve’s interest rate decision later in the day and on uncertainty surrounding Sino-U.S. trade negotiations. ** The Shanghai Composite index was flat at 3,090.64 points. The blue-chip index was also unchanged. ** CSI300’s financial sector sub-index rose 0.7 percent, the consumer staples sector slipped 0.2 percent, while the healthcare shares slid 0.3 percent. ** The smaller Shenzhen index fell 0.2 percent and the start-up board ChiNext Composite index declined 1.2 percent. ** The U.S. Federal Reserve is due to announce its interest rate decision later on Wednesday. ** The central bank will remain patient for a little longer than thought just last month, waiting until the third quarter before raising rates once more, and then stay on the sidelines, a Reuters poll of economists showed. ** But “there is the risk of a communication mistake... that the Fed accidentally sends the message that it is very worried about the U.S. and global outlook, and that the next move is in fact a rate cut,” Thomas Costerg, a senior U.S. economist at Pictet Wealth Management, said in a note this week. ** U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin plan to travel to China next week for a new round of trade talks with Chinese Vice Premier Liu He, a White House official said on Tuesday. ** But a Bloomberg report on Tuesday said that progress in the talks was slowing as Chinese officials have “stepped back” from some initial promises they made on improving intellectual property protections demanded by the United States. ** That contrasted with a Wall Street Journal report claiming Liu would travel to Washington in the week of April 1 as the two sides aim for a deal by the end of the month, and cited unnamed administration officials as saying that the trade talks were in the final stages. ** Technicals also limited A-shares’ upward room. The Shanghai index had faced pressure in previous sessions above 3,100 points and may “may continue to stay volatile,” Galaxy Securities’ analysts wrote in a note on Wednesday. “(Investors) should pay attention to the strength of relevant policy (support).” ** The Shanghai stock index is above its 50-day moving average and above its 200-day moving average. ** Around the region, MSCI’s Asia ex-Japan stock index eased 0.2 percent, while Japan’s Nikkei index closed up 0.2 percent. ** So far this year, the Shanghai stock index is up 23.9 percent and the CSI300 has risen 27.4 percent. Shanghai stocks have risen 5.1 percent this month. ** About 35.86 billion shares were traded on the Shanghai exchange, slihgtly higher than the previous session’s 35.09 billion. ** The largest percentage gainer in the main Shanghai Composite index was Xinjiang Tianfu Energy Co Ltd, up 10.1 percent, while the largest percentage loser was Shenzhen Sunxing Light Alloys Materials Co Ltd, down 8.2 rcent.

Reporting by Noah Sin; Editing by Shreejay Sinha

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