Shanghai opens down, closes one of the worst days since February 2016 after US tariffs kick in. Paper producers, port operators and airlines suffer the most.
Shanghai (AsiaNews/Agencies) – Chinese stocks are on a downward trend. The Shanghai Composite Index dropped 0.3 per cent at the break, taking its weekly loss to 4.3 per cent. It dropped 9.18 points to 2,724.70, on track for the lowest close since February 2016.
The benchmark of 1,400-plus stocks on the Shanghai bourse headed for a seventh straight weekly loss, the longest streak for the five-day period in six years. Hong Kong’s stocks also fell.
This comes as US duties kicked in. and another US billion of duties could be imposed in the next two weeks, making things worse.
“The biggest concern for the market is the unpredictability of the trade war and no one knows to what level it will be escalated, with the two sides being very hawkish now,” said Wang Zheng, chief investment officer at Jingxi Investment Management in Shanghai.
“In the past six months, the Sino-US trade relationship has gone from tariff threats to implementation,” said Tai Hui, chief market strategist at JPMorgan Asset Management in Hong Kong.
“These tensions are like an ongoing chronic back pain,” he added. “Investors may not notice for a while, but they can come back and haunt us from time to time.”
Paper makers were among the worst performers on the mainland equity markets amid concerns that the trade spat will weaken the yuan and increase the costs of importing pulp. Shandong Sun Paper Industry Joint Stock dropped 2.2 per cent whilst Xiamen Anne shed 2.1 per cent.
Transport stocks from port operators to airlines also bore the brunt of the sell-off. Yingkou Port Liability lost 3.6 per cent and Shanghai International Airport sank 3.3 per cent. China Eastern Airlines lost 2.2 per cent.