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Apart from trade, the slowdown in the national economy has also raised concerns among investors, with questions about the country's economic outlook still worrisome. This also comes on the May economic data, including growth in capital investment and retail sales, expectations missing.
Declines in continental markets also come as the Chinese currency has extended its losses against the dollar. The People's Bank of China has set the yuan's midpoint at its lowest level in six months on Wednesday.
"I would say that concerns about trade, combined with existing data that could, in the near future, be another surprise for the market, actually worsen the risk we are currently seeing on the currency," Helen Qiao, Chief More China's big economist at Bank of America Merrill Lynch, said "Street Signs" CNBC.
While analysts believe that volatility should persist in the near term, the approaching second half of the year could prove to be a watershed.
"In the short term, I think we'll always be dealing with volatility … The trade dispute, the news going around is changing every day, but I think people are rating it rather negatively," Kevin said. Leung, Executive Director. for the investment strategy at Haitong International Securities.
"Negotiations will last, so I think it will be a long-term thing," but investors could become more immune to trade headlines and focus on fundamentals as the temporary profits of Chinese companies start pouring in, said Leung .
On Wednesday, the Shanghai Composite fell 1.11% and the leading CSI 300 fell 2.05% at the end of the session. The Shenzhen composite, meanwhile, was down 1.29%.
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