China, Hong Kong stocks falter on trade worries, Fed caution

Hengan International

20/03/2019 04:50

* SSEC -1 pct, CSI300 -0.9 pct; HSI -0.5 pct
    * Caution ahead of Fed interest rate decision
    * U.S.-China trade talks to resume next week

    HONG KONG, March 20 (Reuters) - Shares in mainland China and
Hong Kong fell on Wednesday after a report suggested possible
hurdles in Sino-U.S. trade talks, and as investors exercised
caution ahead of a policy decision by the U.S. Federal Reserve
which is expected to throw more light on its rate plans for the
year.
** At the midday break, the Shanghai Composite index  .SSEC  was
down 1 percent at 3,059.17 points, and the blue-chip CSI300
index  .CSI300  was down 0.9 percent.
** CSI300's financial sector sub-index  .CSI300FS  was lower by
0.2 percent, the consumer staples sector  .CSI000912  slid 1
percent, and healthcare shares  .CSI000913  lost 1.4 percent.
** The smaller Shenzhen index  .SZSC  was down 1.7 percent and
the start-up board ChiNext Composite index  .CHINEXTP  was
weaker by 2.7 percent.
** The U.S. Federal Reserve is due to announce its interest rate
decision later on Wednesday.  FED/DIARY 
** The central bank will remain patient for a little longer than
thought just last month, waiting until the third quarter before
raising rates once more, and then stay on the sidelines, a
Reuters poll of economists showed.  urn:newsml:reuters.com:*:nL1N215055
** But "there is the risk of a communication mistake... that the
Fed accidentally sends the message that it is very worried about
the US and global outlook, and that the next move is in fact a
rate cut," Thomas Costerg, a senior U.S. economist at Pictet
Wealth Management, said in a note this week.
** U.S. Trade Representative Robert Lighthizer and Treasury
Secretary Steven Mnuchin plan to travel to China next week for a
new round of trade talks with Chinese Vice Premier Liu He, a
White House official said on Tuesday.  urn:newsml:reuters.com:*:nL1N21617G
** But Bloomberg reported on Tuesday that progress in the talks
was slowing as Chinese officials have "stepped back" from some
initial promises they made on improving intellectual property
protections demanded by the United States.  urn:newsml:reuters.com:*:nL1N21617G
** High-level officials have not met face-to-face since
President Donald Trump delayed a March 1 deadline to raise
tariffs on $200 billion worth of Chinese imports.  urn:newsml:reuters.com:*:nL1N21617G
** Analysts at Galaxy Securities said the Shanghai index had
faced pressure in previous sessions above 3,100 points as
investors grew cautious. "In the short run, the A-share market
may continue to stay volatile. (Investors) should pay attention
to the strength of relevant policy (support)," they wrote in a
note.
** Chinese local governments issued 171.7 billion yuan ($25.59
billion) in special bonds in February, up from 154.5 billion
yuan in January, the finance ministry said, as Beijing looks to
fast-track infrastructure projects to boost growth.  urn:newsml:reuters.com:*:nB9N20U010
** Around the region, MSCI's Asia ex-Japan stock index
 .MIAPJ0000PUS  was weaker by 0.5 percent, while Japan's Nikkei
index  .N225  was close to flat.
** Chinese H-shares listed in Hong Kong  .HSCE  fell 0.6
percent. The Hang Seng Index  .HSI  declined 0.5 percent to
29,313.75 points.
** The largest percentage losers on the Shanghai index were
Xinjiang Xintai Natural Gas Co Ltd  603393.SS , down 8.9
percent, followed by Shenzhen Sunxing Light Alloys Materials Co
Ltd  603978.SS , which fell 8.6 percent, and Suzhou Keda
Technology Co Ltd  603660.SS , down by 8.4 percent.

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China stock market graphics suite     http://reut.rs/1NfkoGl
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 (Reporting by Noah Sin; Editing by Subhranshu Sahu)
 ((noah.sin@thomsonreuters.com; Reuters Messaging:
noah.sin.thomsonreuters.com@reuters.net))