August 6, 2018 / 2:00 AM / a year ago

CORRECTED-RPT-WRAPUP 1-China's stocks waver after latest tariff volley

(Corrects wording on tariffs in the first paragraph)

SHANGHAI, Aug 6 (Reuters) - China’s stock markets swung in and out of negative territory on Monday, the first day of trading after Beijing proposed retaliatory tariffs on $60 billion worth of U.S. goods, the latest shot in an escalating Sino-U.S. trade war.

The Shanghai Composite index and the blue-chip CSI300 index gained 0.2 percent in morning trade. Both indexes were off earlier lows.

In contrast, shares in Hong Kong opened higher, with the Hang Seng index gaining 0.4 percent.

The yuan strengthened, gaining about 0.3 percent as of 0136 GMT to change hands at 6.8103 per U.S. dollar.

The rise came despite the central bank setting the yuan’s daily midpoint at 6.8513 per dollar, its weakest level since May 31, 2017.

Traders said Monday’s official fixing largely matched forecasts.

The spot market opened at 6.8200 per dollar and was changing hands at 6.8145 as of 0138 GMT, 143 pips firmer than the previous late session close of 6.8288.

On Friday, the People’s Bank of China said it would require banks to keep reserves equivalent to 20 percent of their clients’ foreign exchange forward dollar sales positions from Monday, in a move to stabilise the yuan currency.

China proposed retaliatory tariffs on $60 billion worth of U.S. goods ranging from liquefied natural gas (LNG) to some aircraft after the Trump administration proposed a higher 25 percent tariff on $200 billion worth of Chinese imports to the United States.

Reporting by Andrew Galbraith and Winni Zhou; Editing by Sam Holmes

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