Mainland stocks fall ahead of tariff deadline

Chinese mainland stocks remained under pressure, ending lower on Wednesday despite the central bank assuring markets that it would keep the yuan stable amid trade war fears.

The blue-chip CSI300 index fell 1.34 percent to end at 3,363.75 points, while the Shanghai Composite Index was off 1.00 percent at 2,759.13 points.

Investors are still nerved as China and the US hurtled toward an end-of-week tariff deadline, although they recouped their losses and ended Tuesday in positive territory.

Chinese currency and equity markets have been on edge ahead of Friday, when US tariffs on $34 billion worth of Chinese goods will kick in. China has said it would retaliate with tariffs on US products.

The sustained fall in stocks and the yuan appeared to be rattling the authorities.

In a statement posted on the website of the People’s Bank of China, the country’s central bank, on Tuesday, Governor Yi Gang said the central bank was closely watching fluctuations in the foreign exchange market and would seek to keep the yuan at a stable and reasonable level.

Following the statement, yuan bounced from 11-month lows on Wednesday.

In addition, the market did not gain any support from the robust growth data in China’s services sector released by a private survey on Wednesday.

For June, the Caixin/Markit services purchasing managers’ index (PMI) rose to 53.9, the highest in four months, from May’s 52.9. This indicated accelerating expansion, albeit softer than historical trends. The 50 mark separates growth from contraction.