June 3, 2019 / 4:39 AM / a year ago

China, HK stocks start month weaker amid global slowdown worries

* SSEC -0.5%, CSI300 -0.2%, HSI -0.4%

* 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) - China and Hong Kong stocks started 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 recent risk-prevention measures might impact market liquidity.

** The CSI300 index dipped 0.2% to 3,623.68 points at the end of the morning session, while the Shanghai Composite Index lost 0.5% to 2,884.54 points.

** The Hang Seng index dropped 0.4% to 26,807.91 points, while the Hong Kong China Enterprises Index gained 0.1% to 10,397.43 points.

** In May, China and Hong Kong stocks both logged their worst monthly declines since last October as Sino-U.S. trade tensions accelerated.

** 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, saying regulators are not planning any such moves at the moment.

** China’s factory activity expanded at a steady but modest pace in May, though the slightly better reading on manufacturing conditions is unlikely to allay growing fears about the impact from a bruising trade war.

** Bucking the broad weakness, China’s leading logistics firms rose on Monday as investors saw those domestic players benefiting from a foreign rival’s probe.

** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.23%, while Japan’s Nikkei index was down 1.35%.

** The yuan was quoted at 6.9021 per U.S. dollar, 0.03% firmer than the previous close of 6.904.

** The largest percentage gainers in the main Shanghai Composite index were Beihai Gofar Marine Biological Industry Co Ltd, up 10.09%, followed by Nanjing Huamai Technology Co Ltd, gaining 10.04% and Fujian Longma Environmental Sanitation Equipment Co Ltd, up by 10.03%.

** The largest percentage losses in the Shanghai index were FUREN Group Pharmaceutical Co Ltd, down 10.02%, followed by Dr.Peng Telecom & Media Group Co Ltd, losing 10.01% and Fuda Alloy Materials Co Ltd, down by 10%.

** So far this year, the Shanghai stock index is up 16.23%, while China’s H-share index rose 2.6%. Shanghai stocks declined 5.84% in May.

** The top gainers among H-shares were Guangdong Investment Ltd, up 3.63%, followed by Guangzhou Automobile Group Co Ltd, gaining 2.78% and Shenzhou International Group Holdings Ltd, up by 2.57%.

** The three biggest H-shares percentage decliners were China Tower Corp Ltd, which dropped 2.27%, China Vanke Co Ltd, which lost 2.2% and Great Wall Motor Co Ltd , down by 1.9%.

** About 14.08 billion shares have traded so far on the Shanghai exchange, roughly 56.0% of the market’s 30-day moving average of 25.14 billion shares a day. The volume traded was 19.52 billion as of the last full trading day.

** As of 0418 GMT, China’s A-shares were trading at a premium of 26.83% over the Hong Kong-listed H-shares.

Reporting by Luoyan Liu and John Ruwitch, Editing by Sherry Jacob-Phillips

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