SHANGHAI: China stocks closed higher on Wednesday as Washington and Beijing looked to rekindle trade talks and confirmed that Presidents Donald Trump and Xi Jinping would meet later this month at the G20 summit.
Expectations of a worldwide wave of policy easing by central banks added to investors’ optimism.
The blue-chip CSI300 index rose 1.3% to 3,715.94 points, while the Shanghai Composite Index gained 1.0% to 2,917.80, paring morning gains.
Trump said on Tuesday teams from the two sides would begin preparations for the leaders to sit down at the G20 summit in Japan.
Confirmation of the Trump-Xi meeting raised hopes of a de-escalation in the intensifying trade war between the world’s largest economies. Analysts doubt a breakthrough deal will be reached in Osaka, but said signs of progress may convince Trump to continue talks and postpone further tariffs on Chinese goods, which had been expected as early as July.
Also lifting sentiment was expectations of easing by global banks.
The U.S. Federal Reserve is expected to leave borrowing costs unchanged at a policy meeting this week but possibly lay the groundwork for a rate cut later this year.
The European Central Bank will ease policy again if inflation fails to accelerate, its President Mario Draghi said on Tuesday, signalling one of the biggest policy reversals of his eight-year tenure and provoking the ire of Trump.
China, which began loosening policy last year, is also expected to announce more economic growth boosting measures in coming months.
Around the region, MSCI’s Asia ex-Japan stock index firmed 1.73% while Japan’s Nikkei index was up 1.72%.
The yuan was quoted at 6.9051 per U.S. dollar, 0.22% firmer than the previous close of 6.92.
As of 0715 GMT, China’s A-shares were trading at a premium of 25.66% over the Hong Kong-listed H-shares. - Reuters