Chinese stocks gained on Monday following reassurances that Beijing would intervene to safeguard the economy from the effects President Donald Trump’s latest tariffs.
Stocks rose by more than 1% with the Shanghai Composite Index and the blue-chip CSI300 both rising 1.3% to 2,924.11 points and 3,848.32 points respectively.
According to Bloomberg, the Chinese State Council vowed to keep “reasonable ample” liquidity and “reasonable growth” in aggregate financing. Reaffirming a proactive fiscal & monetary policy, the Council described the effects of the ongoing trade tensions with the United States as “manageable”.
It would appear that the impact of the trade war has been somewhat priced-in. Whereas the Chinese stock market lost a quarter of its value in 2018 at the start of the dispute, it is up 17% this year. This comes, despite significant tariffs. Only yesterday the United States imposed a further 15% tariff on $115bn of Chinese goods..
Both investors and the Chinese government will be buoyed by recent economic data that showed increased manufacturing activity in August.
Global stocks meanwhile were down on Monday morning, with the MSCIs All-Country World Index, which tracks shares across 47 countries, down 0.1% on the day. Admittedly U.S. markets were closed for Labor Day.