China Stocks Slide as Trade Truce Boosts Market Sentiment
China's stock market experienced a decline following a U.S.-China trade truce, as investors pivoted their attention to domestic earnings and economic fundamentals. The blue-chip CSI300 and Shanghai Composite indexes ended lower, with the Hang Seng index also dipping. Despite this, the overall market trend remains positive.
China's stock market concluded the week on a downward trend, reversing some of the gains made earlier after reaching a decade-high due to a U.S.-China trade truce. Investors shifted focus towards domestic corporate earnings, leading to profit-taking and a keen eye on economic fundamentals.
On Thursday, U.S. President Donald Trump announced an agreement with China's President Xi Jinping to reduce tariffs in exchange for tackling illicit fentanyl trade, buying U.S. soybeans, and maintaining rare-earths exports. Despite this development, the CSI300 Index fell by 1.5% and the Shanghai Composite by 0.8%, alongside a 1.4% drop in Hong Kong's Hang Seng benchmark.
While the Shanghai Composite crossed the significant 4,000 level this week, underlining positive market sentiment from last Sunday's hint of a trade framework between the U.S and China, experts like Li Hao warn about ongoing structural challenges as the market reacts to fundamental shifts and global liquidity conditions.
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