=ASIA MARKETS: Hong Kong And China Shares Fall As US Threatens More Tariffs
HONG KONG (Jul 11) -- Hong Kong shares skidded with the rest of the region on Wednesday after the U.S. said it would impose tariffs on more Chinese goods, potentially escalating a trade war between the world’s two largest economies.
The Hang Seng Index had fallen 1.4% to 28,269.72 by noon. Social media and gaming major Tencent Holdings declined 1.8% while China Construction Bank lost 2.2% and London-headquartered HSBC Holdings shed 1.2%. The three contributed most to the index’s losses by points.
In the mainland, the Shanghai Composite slumped 1.9% on Wednesday while the onshore traded yuan slid 0.5% against the U.S. dollar to 6.6648.
The Nikkei Asia300 Index fell 1.1%, while futures pointed to a weaker opening for all three major indexes on Wall Street. The White House late on Tuesday said it would assess a 10% tariff on $200 billion of Chinese imports. The news came less than a week after Washington introduced new tariffs on $34 billion of Chinese goods, prompting an equal response from Beijing.
“The risk of a trade war is on the rise again,” said Jason Chan, vice head of research at Bright Smart Securities. “From a technical point of view, the Hang Seng Index’s recent rebound was accompanied by a relatively small turnover, meaning it had insufficient momentum to rise further.”
Chan was referring to the gauge’s 1.8% advance across Friday and Monday after the first batch of import tariffs came into effect. He expects the Hang Seng to test support near 28,000 points in the near term.
CSPC Pharmaceutical Group edged 1.1% higher after saying the U.S. Food & Drug Administration had approved its investigational new drug application for the treatment of allergic rhinitis and asthma. The company also said it had received approval from the China Drug Administration regarding the consistency of quality and efficacy evaluation for a generic drug used to treat hypertension and heart failure.
China Eastern Airlines fell 1.2% in Hong Kong after the state-controlled carrier disclosed plans to raise up to $2.22 billion from share issues in mainland China and Hong Kong.
Great Wall Motor climbed 2.3% after saying it plans to form a 50-50 joint venture with Germany’s BMW for the research and production of new energy vehicles and internal combustion vehicles. Brilliance China, an existing joint venture partner with BMW, dropped 2.9%.
China Petroleum & Chemical, or Sinopec, fell 1.1%. The company on Tuesday said it would inject 4.9 billion yuan ($736 million) in capital for a 49% stake in a joint venture with controlling shareholder Sinopec Group. The JV, Sinopec Capital, will engage in project investments and financial services.
Property developer Greenland Hong Kong Holdings declined 2.4% after reporting a 5.8% decrease in contracted sales for the first six months of 2018. Yuzhou Properties declined 3.5% after reporting a 12.5% year-over-year decrease in June sales.
West China Cement climbed 1.6% after saying it expects to report a substantial increase in net profit for the six months ended June.
Power Financial Group fell 2.9% after saying it expects to record a loss for the January-to-June period. It had reported a loss of 684 million Hong Kong dollars ($8.26 million) in the year-ago period.
- Amy Lam; amy.lam@NikkeiNewsrise.com; +852 39605150
- Edited by Suzannah Benjamin
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