Shares in China climbed on Tuesday after Beijing said it is sending its top official to the United States this week for trade talks, despite the White House threatening fresh tariffs. The markets managed to claw back some of the losses from Monday's sell-off following this announcement. At the close of market hours, the Shanghai Composite index was up 0.7 percent at 2,926.39, and the blue-chip CSI300 index was up 1 percent.
CSI300's financial sector sub-index was higher by 0.4 percent, the consumer staples sector rose 1.3 percent, the real estate index climbed 2.2 percent and healthcare shares were up 1.6 percent. The smaller Shenzhen index ended up 1.6 percent and the start-up board ChiNext Composite index was higher by 0.6 percent.
Shares climbed in the afternoon session as the Chinese commerce ministry confirmed that Vice Premier Liu He will go ahead with his visit to the United States on May 9 and May 10 for bilateral trade talks. On Monday, a Chinese Foreign Ministry spokesman had said that China's trade negotiation team is "preparing to go to the United States for the discussions" but did not specify if Liu would lead the delegation.
However, the recovery was not enough to wipe out Monday's losses, which marked the Chinese stock market's most severe daily fall in over three years. The sell-off came on the heels of US President Donald Trump threatening to raise tariffs on $200 billion worth of Chinese goods to 25 percent from 10 percent by Friday, and to target the remaining Chinese imports with tariffs "soon". Senior US officials said that China has backtracked on commitments it made during trade talks.
The threat "is a frequently used trick by Trump on the stage of international politics, investors should pay attention, treat it logically and (there is) no need to be too pessimistic," Kaiyuan Securities' analysts, who see the market's fall as an opportunity to add positions, wrote in a note on Tuesday.
Most analysts estimate direct US losses so far of 0.1-0.2 percent of gross domestic product, while for China the damage could be 0.3-0.6 percent of GDP. The French Finance Minister urged both the United States and China on Tuesday to avoid escalating trade tensions in their current negotiations to keep global growth on track.
Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.4 percent, while Japan's Nikkei index closed down 1.5 percent. The yuan recouped most of its early losses on Tuesday afternoon after Beijing confirmed Liu's visit to Washington. The currency was seen at 6.7654 per dollar as of 1051 GMT.
The largest percentage gainers in the main Shanghai Composite index were Harbin High-Tech Group Co Ltd, Gansu Dunhuang Seed Group Co Ltd and Jinjian Cereals Industry Co Ltd, all up by 10.1 percent. So far this year, the Shanghai stock index is up 17.3 percent and the CSI300 has risen 23.6 percent. The index has declined 4.9 percent this month.
About 25.33 billion shares were traded on the Shanghai exchange. The volume in the previous trading session was 32.7 billion. The Shanghai stock index is below its 50-day moving average and above its 200-day moving average.