U.S. Stock Futures Gain; China Shares Rise Despite Trade Woes

(Bloomberg) -- U.S. stock index futures advanced, with China’s shares rising on an injection of fresh liquidity from the PBOC as investors shrugged off concerns the Asian nation could retaliate after President Donald Trump blacklisted Huawei Technologies Co.

S&P 500 Index futures contracts expiring in June rose as much as 0.5% after the underlying gauge fell for a second straight session. Dow Jones Industrial Average contracts were up as much as 0.5%, while those on the Nasdaq 100 gained up to 0.7%. The S&P 500 Index dropped 0.7% on Monday, with semiconductor stocks among the biggest laggards. The tech-heavy Nasdaq also saw its biggest decline in a week.

The Shanghai Stock Exchange Composite Index advanced as much as 1.7%. China’s central bank offered 80 billion yuan of 7-day funding, the biggest single-day injection in more than a month, but it’s most likely a one-off move to ease funding strains.

“We’re probably seeing a bit more of the ‘buy the dip’ mentality that has kept markets relatively well supported this year,” said Nick Twidale, the chief operating officer of Rakuten Securities Australia in Sydney. “Huawei news is the current market influencer and expect traders to continue to focus on updates with regard to its short and long-term prospects.”

Trump ratcheted up his trade dispute with China last week by announcing moves to curb Huawei’s business. China’s ambassador to the European Union, Zhang Ming, said China could retaliate, calling Trump’s moves “politically motivated” and an “abuse of export-control measures.”

To contact the reporter on this story: Jackie Edwards in Sydney at jedwards160@bloomberg.net

To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Naoto Hosoda, Teo Chian Wei

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