After Trump announces tariff delay, China’s shares, yuan surge

Chinese stocks and the yuan jumped at the start of trade on Monday after US President Donald Trump said he would delay an increase in tariffs on Chinese goods thanks to “productive” trade talks.

Trump said that he and Chinese President Xi Jinping would meet to seal a deal if progress continued.

China’s benchmark Shanghai Composite Index was 2.1 per cent higher in early trade, having touched its highest level since August 1.

The blue-chip CSI300 index hit its highest level since June and was last up 2.2 per cent.

In Hong Kong, the Hang Seng rose 0.1 per cent and the Hang Seng China Enterprises Index added 0.7 per cent.

The news also pushed China’s yuan higher, with the onshore unit trading as firm as 6.6768 per dollar, its strongest level since July 17.

Its offshore counterpart strengthened to 6.6795 per dollar, its firmest since July 13.

After falling more than 11 per cent in the fourth quarter of 2018 due to concerns about slowing domestic growth and the trade war, the Shanghai Composite index has staged a rebound, adding more than 14 per cent so far this year.

As news emerged last week that China and the United States were achieving progress in high-level trade talks, Chinese blue-chip shares posted their best week in more than three years as investors bet that the two countries would reach a deal before the original March 1 deadline.

Chinese 10-year government bond futures dipped lower, with the most traded contract, for July delivery, down 0.l6 per cent at 97.380.