Chinese stocks fall for third day as investors brush aside trade deal to keep watch on thorny issues
- JPMorgan Asset Management says some issues are unresolved and are likely to cast a shadow on the next round of trade talks
- China is expected to release key December economic data on Friday
Chinese stocks retreated for a third day, as traders looked past the tentative truce in the US-China trade war to focus on lingering issues that could still fray the relationship between Beijing and Washington.
The Shanghai Composite Index dropped 0.5 per cent, or 15.96 points, to 3,074.08 on Thursday, taking the three-day decline to 1.3 per cent. Hong Kong’s Hang Seng Index fared better, rising 0.4 per cent to 28,883.04.
While officials from China and the US hailed the signing of the phase one trade deal that would require the Asian nation to do more to protect intellectual property and increase procurement of American goods, some investors including JPMorgan Asset Management said markets may still be primed for wild swings on possible further friction in the future.
“Highly sensitive issues like the US’ export ban on several Chinese companies, increased scrutiny on Chinese investments abroad, and China’s application of its commitment to treat foreign and domestic business alike within China are likely to make headlines throughout the year,” said Hannah Anderson, a strategist for global markets at the asset management firm. “Markets will likely continue to price in an elevated risk premium, which could be a source of volatility throughout 2020.”
Traders were also awaiting the release of China’s key economic data on Friday, including full-year economic growth for 2019. The economy may have expanded by more than 6 per cent last year, Vice-Premier Liu He said in an interview with the state-run Xinhua news agency after he signed the trade agreement in Washington.