Mainland stocks tumble as China cut tariffs on over 850 products

Major markets in Asia were subdued in Monday trade even amid greater optimism for U.S.-China relations. Mainland Chinese stocks tumbled. The Shanghai composite fell 1.40% to close at 2,962.75, while the Shenzhen composite dropped 1.92% to 1,667.71. The Shenzhen component was down 1.69% to 10,056.21 Hong Kong’s Hang Seng index was flat in its final hour of trade. China on Monday said it will lower import tariffs on over 850 products from Jan.1, including frozen pork, as well as some information technology products starting July 1.

Trade optimism overall boosted sentiment as U.S. President Donald Trump on Friday said he had “a very good talk” with China’s leader Xi Jinping about the so-called phase one trade deal they struck in mid-December. That indicated more progress has been made after they reached the initial agreement. The president said in a tweet that China has started “large scale” purchases of U.S. agricultural products, and a formal deal signing is being arranged. On Saturday, he said both countries would “very shortly” sign the deal.

Japan’s Nikkei 225 was flat, closing at 23,821.11, and the Topix index fell 0.21% to 1,729.42. Australia’s S&P/ASX 200 was down 0.46% to 6,785.10. Major miners in Australia declined. Rio Tinto was down 1.77%, and Fortescue Metals declined 1.19%. BHP Group fell 1.26%. Gold and oil stocks also saw declines. South Korea’s Kospi closed flat to 2,203.71. MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed. The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 97.639, retreating from a high of 97.758 last week.