China Stocks See Modest Gains After Tariff War Pause

MT Newswires Live05-13

Chinese stocks inched up during the opening bell on Tuesday after both Beijing and Washington agreed to halt their tariff war.

The Shanghai Composite Index, the main gauge of Chinese stocks, opened 0.5% higher, rising 16.99 points to 3,386.23 compared with Monday's closing of 3,369.24. The Shenzhen Component Index increased 1% or by 100.78 points to 10,401.94.

Washington will cut extra tariffs to 30% from 145% while Beijing will reduce US duties to 10% from 125%.

While the deal is a "nice big surprise" for the two economies at both sides of the Pacific, "it might be just the beginning of the inevitable collision of the two largest economies," Nomura's chief China economist Ting Lu was quoted by Reuetrs as saying.

Markets will have to be wary of the medium to long-term risk following this rebound, the report said, citing Ting.

Meanwhile, JPMorgan raised its forecast for Chinese economic growth to 4.8% from 4.1% as long as the new tariff rates will be maintained for the rest of the year, according to a separate Reuters report.

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