February 19, 2019 / 7:28 AM / a year ago

Shanghai shares end flat as investors book profits

* Shanghai stocks flat, blue-chip CSI300 index down

* New round of U.S.-China trade talks begins Tuesday

* China pledges more support for banks’ perpetual bonds to boost lending

SHANGHAI, Feb 19 (Reuters) - Shanghai stocks ended flat after briefly touching a near five-month high on Tuesday, as investors booked profits following a surge in the previous session.

** The blue-chip CSI300 index fell 0.2 percent, to 3,439.61 points, while the Shanghai Composite Index briefly hit its highest since Sept. 28 before ending flat at 2,755.65 points.

** Both indexes had leapt around 3 percent on Monday, having gained more than 10 pct this year, thanks to trade optimism and as Beijing stepped up efforts to shore up the economic growth.

** Reports of progress in trade talks between the United States and China have prompted investors to be mildly optimistic that the two countries can reach a compromise by March 1 that will de-escalate their dispute or at least avoid a sharp hike in tariffs, although few details from the talks have emerged.

** A new round of talks between the United States and China to resolve their trade war will take place in Washington on Tuesday, with follow-up sessions at a higher level later in the week, the White House said on Monday.

** China will provide further support for banks’ perpetual bond issuance, including examining ways to broaden the investor base for such bonds, to help boost lending in the economy, a vice central bank governor said on Tuesday.

** China’s decision to cut company taxes and fees is an important part of fiscal policy and is a hard-hitting measure needed to cope with pressure on the economy, state media reported Vice Premier Han Zheng as saying.

** Shares in Guangdong-based firms surged after Beijing issued guidelines for developing a “Greater Bay Area” around the Pearl River Delta, in a bid to spur growth in Guangdong province and the cities of Hong Kong and Macau.

** The development plan will “further enhance and support a leading role of Guangdong-Hong Kong-Macau Greater Bay Area in national economic development and opening up”, China’s State Council, or cabinet, said in the guidelines.

** Around the region, MSCI’s Asia ex-Japan stock index fell 0.16 percent, while Japan’s Nikkei index closed up 0.1 percent.

** At 07:09 GMT, the yuan was quoted at 6.7775 per U.S. dollar, 0.15 percent weaker than the previous close of 6.7675.

** So far this year, the Shanghai stock index is up 10.5 percent and the CSI300 has risen 14.2 percent, while China’s H-share index listed in Hong Kong is up 10 percent. Shanghai stocks have risen 6.62 percent this month.

** As of 07:10 GMT, China’s A-shares were trading at a premium of 18.05 percent over the Hong Kong-listed H-shares. (Reporting by Shanghai Newsroom; Editing by Shreejay Sinha)

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