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SHANGHAI, July 6 – Chinese stocks jumped into late trading on Friday, but the losses were not as high as the Chinese economy. 19659002] $ 34 billion of Chinese imports at 0401 GMT. Chinese state media said that China had implemented tariffs on $ 34 billion worth of items imported from the US in response.
At 0630 GMT, the CSI300 benchmark index was up 1.1 percent. The Shanghai Composite Index was 0.8 percent higher after flirting with two-year lows in the morning session.
Market participants said some of the following are likely to be skeptical about sustainability of the late rally.
"It looks more like a self-initiated market rebound," said a Shanghai-based hedge fund manager, who declined to be identified.
The fund manager
"State intervention is bad for the market, as it only prolongs, rather than stems the market fall, if we're not yet at the bottom, "
" The chances are slim for China and the US to reach an agreement on trade issues, and trade war worries least th e next two years, "said Yan Weixiao, an badyst with Founder Securities, adding that things could be" dangerous "for Chinese stocks.
Yan said the psychologically key level of 2,638 points for the SSEC, which was hit in March 2016 will probably be broken.
As stocks turned around, Chinese treasury future fell. The most-traded Chinese, the most-traded contract, were 0.27 percent lower at 95.580.
China's yuan was just 0.1 percent weaker against the dollar at 6.6453, trimming losses as the dollar fell.
" There should not be huge volatility in the market because it's all expected. Investors know what's going to happen and have already been priced in, "said Li Liuyang, senior foreign exchange badyst at China Merchants Bank in Shanghai, referring to the yuan market.
" The market will pay attention to any follow up, whether Trump escalates further, or anything unexpected happens. "
Gao Qi, FX strategist at Scotiabank, said in a note on Friday he expected the Chinese authorities to step down to the market and prevent them from depreciating if need be
"We see a strong resistance of 6.70 for now and the 6.90 level seems to be China's bottom line for the yuan exchange rate. China will fail to escalate trade tensions with the US, "he wrote. (Reporting by Winni Zhou, Luoyan Liu and John Ruwitch, Andrew Galbraith and Samuel Shen, Editing by Sam Holmes)
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