May 17, 2019 / 5:07 AM / 9 months ago

China stocks drop as weak yuan, trade woes batter sentiment

* SSEC -1.5%, CSI300 -1.7%, HSI -0.8%

* Offshore yuan shed gains since Trump-Xi meet, onshore yuan lowest since Dec 2018

* State planner admits tariffs’ impact on economy, but says it’s controllable

HONG KONG, May 17 (Reuters) - Chinese stocks were trading on shaky footing on Friday, poised for their fourth straight weekly decline, as the yuan dropped amid heightened worries over the Sino-U.S. trade dispute and its impact on the country’s economy. ** At the midday break, the Shanghai Composite index was down 1.5% at 2,912.48 points, and down 0.9% so far this week, having stayed in negative territory for the last three weeks. ** The blue-chip CSI300 index dropped 1.7%, and was down 1.3% on the week. ** CSI300’s financial sector sub-index slipped 1.5%, the consumer staples sector dropped 2%, the real estate index down almost 2% and the healthcare sub-index fell 1.7%. ** The offshore yuan weakened past 6.94 per dollar for the first time since Nov. 30, 2018, erasing all gains since the U.S. and Chinese presidents met at the G20 in Argentina. The onshore yuan dropped to 6.9099 per dollar, its lowest since December 2018. ** China’s state planner said on Friday trade frictions with the United States has had some impact on China’s economy, but it was “controllable” and countermeasures would be rolled out when needed to “keep economic operations within reasonable range”. ** The comments came after China reported surprisingly weaker growth in retail sales and industrial output for April this week. ** Trade tensions worsened this week after the Trump administration officially added China’s Huawei Technologies Co Ltd to a trade blacklist, immediately enacting restrictions that will make it extremely difficult for the telecoms giant to do business with U.S. companies. ** “The trade negotiation is the main reason of volatility in asset prices,” Ming Ming, an analyst at Citic Securities, wrote in a note on Friday. ** “The renminbi has been really weak,” said Alex Wong, a director and fund manager at Ample Finance Group in Hong Kong. “People, in general, are more bullish towards U.S. assets in a trade war environment. The dollar has been strong recently and that is hurting emerging markets.” ** An index for IT hardware makers in Hong Kong dropped 3.7%. Chinese H-shares listed in the city was down 0.6%, while the Hang Seng Index fell 0.8% to 28,056.69 points. ** The smaller Shenzhen index dropped 1.7% and the start-up board ChiNext Composite index slipped 1.8%. ** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.5%, while Japan’s Nikkei index was up 1.1%. ** The largest percentage losses in the Shanghai index were Jiangsu SOPO Chemical Co Ltd, which dived 9.8%, followed by Lifan Industry Group Co Ltd, which lost 9.6% and Dongfeng Electronic Technology Co Ltd, which dropped 8.8%. ** As of midday, China’s A-shares were trading at a premium of 23.61% over the Hong Kong-listed H-shares. ** The Shanghai stock index is below its 50-day moving average and above its 200-day moving average.

Reporting by Noah Sin, Editing by Sherry Jacob-Phillips

Nuestros Estándares:Los principios Thomson Reuters
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