China stocks slide as Trump-Xi summit offers little to excite investors

HONG KONG: China stocks fell on Friday amid a broader market selloff as a two-day summit between US President Donald Trump and Chinese leader Xi Jinping produced few deals between the world’s top two economies to excite investors.

China’s blue-chip CSI300 Index and the Shanghai Composite Index each closed down more than 1 percent as a risk-off mood set in global markets. Both indexes retreated from modest gains in early trade but remained close to recent peaks.

Hong Kong’s benchmark Hang Seng lost 1.6 percent, tracking broader markets as investors’ euphoria over tech stocks gave way to inflation fears amid rising expectations of US rate hikes this year.

Trump and Xi concluded their two-day summit that included talks on trade, Iran and Taiwan on Friday.

“I think we were optimistically looking at the meeting and maybe half expecting some huge trade agreement to be proposed or announced, and from that view, it has disappointed,” said Nick Twidale, chief market analyst at ATFX Global.

It was undecided whether the October trade truce would be extended after it expires later this year, US Trade Representative Jamieson Greer told Bloomberg TV on Friday, but added that deals had been firmed up on Chinese purchases of farm goods and beef.

Investor attention will be on whether detailed agreements are announced now that the summit is over. “This (summit) was not a meeting aimed at a full reset of US-China relations,” said Cliff Zhao, chief economist at CCB International. It was more about promoting high-level communication, reducing near-term uncertainty, and setting clearer boundaries for competition, Zhao said.

Investors are focusing on geopolitical issues such as Iran and Taiwan, but it was hard to make substantive progress, said Lynn Song, chief economist for Greater China at ING.