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Chinese Indexes Celebrate Trade Data and Mexico Deal

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Jun. 10 2019, Published 9:26 a.m. ET

What a weekend can change

Last week, Chinese indexes had four straight trading sessions in the red. Thanks to the holiday on Friday, it didn’t become five. Then, Trump announced late Friday night that the tariffs on Mexican imports would be indefinitely suspended. To add to that, China’s National Bureau of statistics released May’s trade data today, which showed rising exports, falling imports, and a swelling trade surplus.

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China’s exports in May rose 1.1% against an expectation of a 3.8% fall. However, imports fell 8.5%, higher than the expected 3.8% fall. As a result of rising exports and falling imports, China’s trade balance in May rose to $41.65 billion from $13.84 billion in April. May’s trade balance was more than double the $20.65 billion that analysts were expecting.

Chinese Indexes

After dropping 2.45% last week, China’s benchmark Shanghai Composite Index turned green today. The index gained 0.86% today. The index opened slightly higher and maintained upward momentum until the lunch break. Thereafter, the index dropped marginally but ended the day on a positive note. The tech-heavy Shenzhen Component was a bigger beneficiary of the positive news, gaining 1.61% today. Last week, the index lost 3.79%.

China-focused ETFs

On Friday, the iShares MSCI China ETF (MCHI) gained 1.1%. The ETF gained 0.89% last week, driven largely by Friday’s performance. The Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR) gained 0.54% on Friday, ending the week 0.38% up. The KraneShares CSI China Internet (KWEB) was the biggest gainer among the three on Friday, gaining 2.16%. The ETF ended last week 1.89% up.

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