March 25, 2019 / 4:42 AM / 5 months ago

China, Hong Kong stocks drop, tracking global selloff

* SSEC -1.4 pct, CSI300 -1.7 pct, HSI -1.8 pct

* HK->Shanghai Connect daily quota used -7.8 pct, Shanghai->HK daily quota used 3.1 pct

* FTSE China A50 -2.1 pct, BNY Mellon ADR China Select Index -3.0 pct

SHANGHAI, March 25 (Reuters) - China and Hong Kong stocks fell on Monday, tracking a global selloff, as investors ditched shares and fled to the safety of bonds on growing fears about a U.S. recession.

** The CSI300 index fell 1.7 percent to 3,768.72 at the end of the morning session, while the Shanghai Composite Index lost 1.4 percent to 3,061.65.

** The Hang Seng index dropped 1.8 percent to 28,595.93, while the Hong Kong China Enterprises Index lost 2.0 percent to 11,282.78.

** On Friday, all three major U.S. stock indexes clocked their biggest one-day percentage losses since Jan. 3. The Dow slid 1.8 percent, the S&P 500 was off 1.9 percent and the Nasdaq dropped 2.5 percent.

** A weaker-than-expected Markit PMI reading of U.S. factory activity in March, along with similarly dour reports from Europe and Japan, helped send U.S. Treasury yields into an inversion. The spread between yields of three-month Treasury bills exceeded those of 10-year notes for the first time since 2007.

** “For the short term, some foreign money could retreat from mainland’s consumer firms as the Wall Street selloff could lead to lower overall equity exposure of foreign investors,” TF Securities said in report.

** “Though in the long run, it would help the overall A-share market, in particular the recovery in the valuations of growth stocks, as the unexpected U.S. economic slowdown offers room for further global easing, and for China to lower its domestic interest rates,” the brokerage said.

** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 1.60 percent while Japan’s Nikkei index was down 3.25 percent.

** The yuan was quoted at 6.7138 per U.S. dollar, 0.06 percent firmer than the previous close of 6.718.

** The largest percentage gainers in the main Shanghai Composite index were Jiangsu Sunshine Co Ltd, up 10.06 percent, followed by Harbin Dongan Auto Engine Co Ltd , gaining 10.05 percent and Shanghai Pudong Road & Bridge Construction Co Ltd, up by 10.05 percent.

** The largest percentage losers in the Shanghai index were Shanghai Xintonglian Packaging Co Ltd, down 8.28 percent, followed by Shanghai Phoenix Enterprise Group Co Ltd , losing 7.91 percent and Jiangsu Wuzhong Industrial Co Ltd, down by 7.58 percent.

** So far this year, the Shanghai stock index is up 24.47 percent, while China’s H-share index is up 13.8 percent. Shanghai stocks have risen 5.55 percent this month.

** The top gainers among H-shares were China Telecom Corp Ltd, up 1.15 percent, followed by Guangdong Investment Ltd, gaining 0.54 percent and China Pacific Insurance Group Co Ltd, up by 0.16 percent.

** The three biggest H-shares percentage decliners were China National Building Material Co Ltd, which has fallen 5.51 percent, China Shenhua Energy Co Ltd, which has lost 5.4 percent and CSPC Pharmaceutical Group Ltd , down by 4.9 percent.

** About 22.53 billion shares have traded so far on the Shanghai exchange, roughly 59.8 percent of the market’s 30-day moving average of 37.64 billion shares. The volume traded was 36.48 billion as of the last full trading day.

** As of 04:21 GMT, China’s A-shares were trading at a premium of 23.78 percent over the Hong Kong-listed H-shares.

Reporting by Luoyan Liu and John Ruwitch; Editing by Gopakumar Warrier

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