Investor caution lingers as Trump-Xi call offers no trade breakthrough
SINGAPORE, June 6 (Reuters) - Chinese markets had a muted response on Friday to the rare leader-to-leader call between U.S. President Donald Trump and Chinese leader Xi Jinping that left key issues to further talks, keeping investors cautious about simmering trade tensions.
China's blue-chip CSI300 Index (.CSI300), opens new tab was down 0.1%, while the Shanghai Composite Index (.SSEC), opens new tab was flat. Hong Kong benchmark Hang Seng Index (.HSI), opens new tab dipped 0.4%.
Here are some comments from analysts and investors:
GUO JIANWEN, PARTNER, HEDGE FUND HAIYI CAPITAL, SHANGHAI:
"If you look at the conversation between Chinese and U.S. presidents, there's nothing concrete that's positive. So little impact on stocks. There's only some trading opportunities in the market."
WILLIAM XIN, CHAIRMAN, SPRING MOUNTAIN PU JIANG INVESTMENT MANAGEMENT, SHANGHAI:
"The only good news is that things are not getting worse. If Trump can come to China for a visit in the short term, that would be hugely positive."
GARY NG, SENIOR ECONOMIST, NATIXIS, HONG KONG (VIA EMAIL):
"Although the likelihood of a U.S.-China deal increases with more high-level dialogues, investors remain skeptical that both sides are merely buying time to address some pressing issues.
"The call does not offer much comfort in cutting tariffs but only touching on access of critical materials and tech export control. Therefore, there is no certainty of what kind of deal to make, and it may only be a partial one given the wide range of issues between the U.S. and China."
CHARLES WANG, CHAIRMAN, SHENZHEN DRAGON PACIFIC CAPITAL MANAGEMENT CO, SHENZEN:
"The news is positive to the market, but investors should not over-interpret it. Both sides are still struggling to adapt to each other in a broad confrontational trend."
Wang added that the most profound implication from the talks was Chinese President Xi Jinping's warning to his U.S. counterpart, Donald Trump, against taking provocative steps on Taiwan - a signal, in his view, that China is not prepared to conquer the island by force anytime soon.
"This shows that China is not ready to take back Taiwan in the near term using force. Otherwise, China doesn't need to warn the U.S. against such a scenario."
WANG ZHUO, PARTNER, ZHUOZHU INVESTMENT, SHANGHAI:
Wang said direct communication between China and the U.S. is certainly conducive to removing some misunderstandings, especially following recent finger-pointings.
"However, Trump fickleness has made such talks less and less meaningful to the market."
GAO LE, INVESTMENT ADVISOR, GALAXY SECURITIES, BEIJING:
"It means China's market sentiment will continue to heal.
"Recent yuan appreciation also signifies expectations of China's economic resilience."
He said the fact that U.S. shares fell after the news while U.S.-listed China stocks rose shows investors are more optimistic toward China's economy amid the trade war.
CHARU CHANANA, CHIEF INVESTMENT STRATEGIST, SAXO, SINGAPORE (VIA EMAIL):
"Markets are relieved the Trump-Xi call didn't escalate tensions further but that's not quite a reason to cheer either. While it appears that the tensions of rare-earths minerals and student visas may have been dialled down, investors see the strategic rivalry, particularly around AI and tech dominance, as far from over.
"New issues can flare up anytime, and a comprehensive deal remains unlikely. As long as things do not get worse, markets are content to move on, for now, that means shifting focus squarely to the jobs report due later in the day."
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