Stocks Stumble as U.S. Trade Tensions Spike
China and Hong Kong stocks fell due to rising U.S. trade tensions and losses on Wall Street, despite recent rallies. The U.S. targets more Chinese goods over alleged abuses, affecting market sentiment. China's CSI300 and Hang Seng saw declines, while Pop Mart's profits soared.
- Country:
- China
On Wednesday, stocks in China and Hong Kong experienced a decline as selling pressure intensified post a recent rally, influenced further by new U.S. restrictions on Chinese imports and an overnight decline in the Nasdaq. China's blue-chip CSI300 Index and the Shanghai Composite Index dipped 0.1% by midday, while Hong Kong's Hang Seng fell by 0.6%.
The United States announced on Tuesday its plan to intensify tariffs on Chinese imports such as steel, copper, and lithium, citing alleged human-rights abuses involving the Uyghur community, affecting investor sentiment. Despite the Shanghai Composite Index recently reaching its highest mark since 2015, propelled by renewed U.S.-China trade negotiations and Beijing's regulatory measures, the market faced turbulence.
According to UBS analysts, China's equity markets showed resilience in August, in spite of weak economic data and minimal policy interventions. Analysts forecast potential continuation of the A-share rally, driven by strong retail interest following market upswings, though they note that major banks and telecoms remain defensive picks in view of economic coolness. Overnight slumps on Wall Street continued to challenge Hong Kong's market, notably impacting tech stocks aligned with Nasdaq downturns. Meanwhile, Pop Mart reported significant profit growth, causing a notable stock rise, amid stagnant benchmark lending rates in China.
(With inputs from agencies.)
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