November 11, 2019 / 7:26 AM / 8 months ago

Shanghai stocks fall most in over 4 months as economic, trade worries weigh

SHANGHAI, Nov 11 (Reuters) - China stocks fell on Monday, with the Shanghai index falling the most in more than four months, as investors remained wary about the economic health of the world’s second-largest economy amid uncertainties around a proposed Sino-U.S. trade deal.

** The blue-chip CSI300 index fell 1.8% to 3,902.98, marking its steepest single-day decline since Aug.5, while the Shanghai Composite Index dropped 1.8% to 2,909.97 points, its worst session since July 8.

** China’s producer prices fell the most in more than three years in October, as the manufacturing sector weakened on declining demand and a knock from the Sino-U.S. tariff war, reinforcing the case for Beijing to keep the stimulus coming.

** In contrast, China’s consumer prices rose at their fastest pace in almost eight years, driven mostly by a surge in pork prices as African swine fever ravaged the country’s hog herds. Some analysts say the CPI rise could become a concern for policymakers looking to introduce measures to prop up demand.

** “Judging from the modest interest rate cut on MLF loans earlier this month, the rising inflation somewhat hindered (the easing) of China’s monetary policy,” China Merchants Securities noted in report.

** China’s central bank cut the interest rate on its one-year medium-term lending facility (MLF) loans for the first time since early 2016, as policymakers work to prop up a slowing economy hit by weaker demand at home and abroad.

** There was renewed uncertainty about the prospects of a preliminary Sino-U.S. trade deal.

** U.S. President Donald Trump said on Saturday that trade talks with China were moving along “very nicely,” but the United States would only make a deal with Beijing if it was the right deal for America.

** That came after his comments on Friday that he has not agreed to rollbacks of U.S. tariffs sought by China.

** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 1.26%, while Japan’s Nikkei index closed down 0.26%.

** At 0707 GMT, the yuan was quoted at 7.0055 per U.S. dollar, 0.14% weaker than the previous close of 6.9954.

** So far this year, the Shanghai stock index is up 16.7% and the CSI300 has risen 29.6%, while China’s H-share index listed in Hong Kong is up 4.6%. Shanghai stocks have declined 0.65% this month.

** As of 0708 GMT, China’s A-shares were trading at a premium of 29.05% over the Hong Kong-listed H-shares. (Reporting by Shanghai Newsroom; Editing by Rashmi Aich)

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