May 8, 2019 / 7:36 AM / 2 months ago

China stocks spooked by tariff risk amid mixed trade data

* Shanghai shares fall 1.1 pct, blue chips shed 1.4 pct

* China April exports disappoint, adding to trade worries

* Imports beat estimates, but sustainability in doubt

HONG KONG, May 8 (Reuters) - The Chinese stock market fell on Wednesday on weaker-than-expected exports numbers, adding to investor concerns over Beijing and Washington’s protracted tariff tussle. ** The Shanghai Composite index fell 1.1 percent to 2,893.76, while the blue-chip CSI300 index lost 1.4 percent. ** CSI300’s financial sector sub-index dropped 1.8 percent, the consumer staples sector lost 1.4 percent, the real estate index fell 1.3 percent and the healthcare sub-index was down 1.6 percent. ** The smaller Shenzhen index shed 0.7 percent and the start-up board ChiNext Composite index fell 1.5 percent. ** China’s exports unexpectedly shrank in April, though imports surprised with their first increase in five months, painting a mixed picture of the economy. Investors had hoped the data would add to signs that the country’s economy is steadying. ** With policy support, “overall import demand may still pick up in the coming months on the back of higher domestic demand, but a challenging global trade environment means overall import growth could remain modest in 2019,” Jingyang Chen, economist at HSBC, wrote in a note on Wednesday. ** Chinese Vice Premier Liu He will travel to Washington for two days of trade talks this week, China said on Tuesday, setting up a last-ditch bid for a deal that would avoid a sharp increase in U.S. tariffs on Chinese goods. ** U.S. officials have accused China of reneging in the past week on substantial commitments made during months of negotiations aimed at ending their trade war, prompting Trump to issue a new deadline to raise tariffs on $200 billion worth of Chinese goods to 25 percent from 10 percent. ** “The chance of finalising the bilateral trade talks during Liu He’s visit has declined and the risk of renewed trade tensions has risen. This would cloud China’s export outlook in H2, especially considering how much of China’s exports were frontloaded late last year,” Betty Wang, senior China economist at ANZ wrote in a note, reacting to the exports figures. ** The People’s Bank of China injected 10 billion yuan $1.48 billion) through seven-day reverse repos on Wednesday, bringing the net injection so far this week to 50 billion yuan. The move sent benchmark overnight repo, a key gauge of interbank liquidity, to a four-month low of 1.04 percent. ** Around the region, MSCI’s Asia ex-Japan stock index lost 0.7 percent, while Japan’s Nikkei index closed down 1.5 percent. ** The largest percentage losers in the Shanghai index were Shanghai DZH Ltd, Liaoning Wellhope Agri-Tech Joint Stock Co Ltd and Shanghai Maling Aquarius Co Ltd , all down 10 percent. ** So far this year, the Shanghai stock index is up 16 percent, but it is down almost 6 percent so far this month. ** About 23.15 billion shares were traded on the Shanghai exchange. The volume in the previous trading session was 25.33 billion. ** The Shanghai stock index is below its 50-day moving average and above its 200-day moving average.

Reporting by Noah Sin; Editing by Shreejay Sinha

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