June 3, 2019 / 7:34 AM / a year ago

Shanghai stocks end weaker as slowdown worries dent sentiment

* SSEC -0.3%, CSI300 +0.1%

* China threatens corporate hit-list on eve of new tariffs on U.S. imports

* China says U.S. can’t use pressure to force trade deal

SHANGHAI, June 3 (Reuters) - Shanghai stocks ended the first session of the month on a bearish note on concerns that escalating trade tensions could increase risks of a global slowdown, and as investors were worried Beijing’s stimulus measures might impact liquidity.

** The blue-chip CSI300 index ended up 0.1% at 3,632.01 on Monday, while the Shanghai Composite Index closed 0.3% weaker at 2,890.08 points.

** In May, China and Hong Kong stocks both logged their worst monthly declines since last October as Sino-U.S. trade tensions accelerated. Last month also saw the heaviest foreign outflows via the Stock Connect linking mainland and Hong Kong, with foreign net equities sales reaching more than 50 billion yuan ($7.24 billion).

** Monday’s drop came after China’s chief securities regulator’ comments that the Sino-U.S. trade war is affecting capital markets but the impact is controllable.

** China threatened on Friday to unveil an unprecedented hit-list of “unreliable” foreign firms, groups and individuals that harm the interests of Chinese companies.

** China will investigate whether FedEx Corp damaged the legal rights and interests of its clients, the official Xinhua news agency said on Saturday, after Chinese telecoms giant Huawei said parcels intended for it were diverted.

** The United States cannot use pressure to force a trade deal on China, a senior Chinese official and trade negotiator said on Sunday, refusing to be drawn on whether the leaders of the two countries would meet at the G20 summit to bash out an agreement.

** Going into June, there are still internal and external factors that could weigh on the A-share market’s performance, even as the market’s valuations have returned to historically low levels, investment bank China International Capital Corporation Limited (CICC) noted in report.

** The negative impact from trade disputes and protectionist measures on the global growth could demonstrate more evidently, while Beijing’s measures to prevent financial risks and deleverage small and medium banks could also impact market liquidity and the financial support for the real economy, the investment bank added.

** China’s central bank sought to calm investors on Sunday after last month’s takeover of Inner Mongolia-based Baoshang Bank BAOTO.UL, saying regulators are not planning any such moves at the moment.

** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.37%, while Japan’s Nikkei index closed down 0.92%.

** At 0714 GMT, the yuan was quoted at 6.9069 per U.S. dollar, 0.04% weaker than the previous close of 6.904.

** So far this year, the Shanghai stock index climbed 15.9% and the CSI300 rose 20.6%, while China’s H-share index listed in Hong Kong is up 3%.

** As of 0715 GMT, China’s A-shares were trading at a premium of 26.83% over the Hong Kong-listed H-shares. ($1 = 6.9066 Chinese yuan) (Reporting by Shanghai Newsroom, Editing by Sherry Jacob-Phillips)

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