ANALYST VIEW: China markets fall as Trump leaves Beijing with few wins

China stocks fell on Friday amid a broader market selloff as a two-day summit between U.S. President Donald Trump and China's Xi Jinping produced few deals between the world's top two economies.

Trump departed China on Friday touting business deals, while Beijing warned Washington about mishandling Taiwan and said its war with Iran should never have started. There were scant details on the deals, however.

China's blue-chip CSI300 Index .CSI300 and the Shanghai Composite Index .SSEC fell over 1%. In currencies, the yuan CNY=CFXS remained close to a three-year high against the dollar that it hit on Thursday.

ANALYST COMMENTS:

YUE SU, PRINCIPAL ECONOMIST FOR CHINA, EIU, SHANGHAI:

"In terms of substance, I do not think there have been major surprises, but the two sides have managed to agree on a new 'paradigm' for bilateral relations.

"I think the market will view this as marginally positive. However, there are still questions about what this new paradigm can realistically deliver. The framework itself has a three-year time limit, although both sides highlighted the possibility of extending it further. Even so, it could prove fragile, constrained by the U.S. Congress, China hawks in Washington and Trump's own political standing domestically.

"Still, it appears that this new paradigm was at least partly initiated by China, which suggests Beijing has an interest in adhering to it. As a result, strategic stability has improved somewhat and tail risks have been mildly reduced, which should be seen as a positive sign. But again, this is likely to be a fragile stability that does not eliminate underlying frictions. The two presidents now have some political incentive to keep the relationship on track, but there are still too many moving pieces."

FRANTISEK TABORSKY, STRATEGIST, ING, LONDON:

"Markets didn't hear enough from Beijing to turn more optimistic on the Gulf and hot U.S. data is now feeding into greater confidence about a Fed hike.

"The dollar seems to be gaining some serious short-term momentum. We had speculated yesterday that the Trump-Xi meeting could have yielded some positive headlines (perhaps also on Iran) that would have capped USD and lifted sentiment.

"It's been too little so far and a turn lower in equity futures today alongside another leg higher in oil prices is allowing the dollar to benefit from the latest hawkish data and the resulting repricing higher in Fed hike bets."

-Rae Wee and Gregor Stuart Hunter/Reuters