There's about a 70 percent chance that China and the US will reach some kind of trade agreement in the second half of 2019, which will be a boost to stocks in the Chinese mainland, a Chinese economist said at a press conference on Tuesday.
If such an agreement is reached, it will drive up mainland stocks by about 5 to 10 percent, according a statement sent by global financial service provider UBS to the Global Times Tuesday.
The forecast comes amid low market sentiment on the two mainland bourses. On Tuesday, the Shanghai Composite Index slipped by 0.96 percent to 2,862.28 points, while the Shenzhen Component Index dipped by 1.23 percent to 8,748.27 points.
Yang Delong, chief economist at the Shenzhen-based First Seafront Fund Management Co, said on Tuesday that mainland stocks might experience a "turning point" around the end of June when the G20
Summit in Osaka, Japan will be held, during which China and the US' top leaders may reach a consensus about trade.
"But I think neither China nor the US is in a rush to reach such an agreement," said Hu at the press conference.
She said that the Chinese economy remains stable due to the government's relatively loose monetary policy and the government wants to make sure that any final trade agreement it reaches with the US is achieved on the basis of equality.
Hu told the Global Times that as the trade talks are an ongoing battle and results are unclear, there will still be uncertainty in the Chinese and global capital markets. However, factors like government policy support and an resilient economy are supporting the Chinese capital markets.
Yi Huiman, head of the China Securities Regulatory Commission, said in a recent interview that there is pressure from the China-US trade dispute on domestic capital markets but the risks are controllable. He also said China's capital markets are becoming stronger and more capable of dealing with risks. Yang also said that as A-share valuations are low, there's not much room for further declines.Newspaper headline: UBS economist sees 70% chance of China-US deal in H2