SHANGHAI/HONG KONG - Chinese shares ended higher and the yuan strengthened on Friday as investors bet Beijing and Washington would be able to salvage a trade deal, despite a hike in U.S. tariffs that sharply escalated their dispute.
China’s major stock indexes ended more than 3% higher on Friday, rebounding sharply in afternoon trade after briefly dipping into the red when the higher U.S. tariffs took effect. Investors had largely been betting on a U.S.-China trade deal soon, and the escalation comes as China’s economy has started to show signs of stabilization, thanks to a flurry of growth-boosting measures.
“Chinese and other policymakers around Asia are likely to be more, rather than less, accommodative. Already we think that China had held back on some stimulus in case negotiations failed,” said Howard Wang, Head of Greater China Equities, J.P. Morgan Asset Management. The yuan firmed on Friday despite China’s central bank setting the midpoint of its daily trading band at its weakest level in 3-1/2 months before the market open.
bad reporting. yuan had its worst week since last summer.