Chinese stock indices erase gains, turns flat on the day
The Shanghai Composite and CSI 300 indices are both flat after the return from the lunch break. They're continuing a similar trend from yesterday - where the rest of the region's bourses are posting healthy gains, but mainland Chinese equities are unable to rally still.
If there's a reason for that, I can only seem to find it in the form of the US-China trade rhetoric and the worries that still linger ahead of the mid-June talks between the two countries.
I mean the PBOC has already done what it can on the week, injecting quite a sizable amount of liquidity via MLF operations yesterday. And with further talks of RRR cuts, it is a signal of further support for liquidity and equities but yet it's not translating to the stock market.
That's a little perplexing to me, but if there's a takeaway from this it is that the trade rhetoric isn't something that has been forgotten just yet. If it starts rearing its ugly head again, we could see further spillover to equities in the rest of the region - and in turn feed into risk sentiment in the market.
Just something to keep in mind.
