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Boeing shares drop to 4-Month low as China tweet hints at lost sales

The shares dropped 3.4 per cent to $342.50 at 11:02 a.m. in New York, the lowest intraday price since Jan. 9. Caterpillar Inc., Apple Inc. and United Technologies Corp

Julie Johnsson | Bloomberg 

Boeing
Aerospace analysts expect Chinese regulators to conduct an especially lengthy review of the Max Boeing

fell to the lowest in four months as trade tensions escalated and the influential editor of a Chinese tabloid warned that the company’s airplane sales in the country could be “reduced.”

Hu Xijin, editor-in-chief of the Global Times, which is published by the Communist Party’s People’s Daily, later told Bloomberg the tweet was his opinion and not the official government stance. Hu regularly weighs in on China’s international affairs, often citing unidentified sources he says are authoritative.

The tweet and jittery market response underscore the risks faced by Boeing, the largest exporter, from the escalating US-trade fracas. The Chicago-based manufacturer’s jetliners so far haven’t been targeted for retaliation by the Chinese government, which has few alternatives for the country’s fast-growing airlines.

has other ways to pressure aside from aircraft orders, which the country has carefully split between the planemaker and European rival Airbus SE for maximum leverage. China was the first to ground the 737 Max, hours after a deadly March 10 crash in and before the plane’s data and voice recorders had been recovered.

Aerospace analysts expect Chinese regulators to conduct an especially lengthy review of the Max as works with safety regulators around the globe to return the single-aisle workhorse to service. China is the largest global market for the 737, Boeing’s main source of profit.

“We’re confident the and China will continue trade discussions and come to an agreement that benefits both U.S. and Chinese manufacturers and consumers,” said Boeing spokesman Gordon Johndroe.

The shares dropped 3.4 percent to $342.50 at 11:02 a.m. in New York, the lowest intraday price since Jan. 9. Caterpillar Inc., Apple Inc. and United Technologies Corp. were among the stocks hit harder as the US and China exchanged trade volleys.

China’s aircraft orders have slowed to a trickle over the past 18 months. But the country isn’t likely to cancel Boeing orders since Airbus’s popular A350 and A320neo lines are sold out through 2021 and 2027, respectively, Ron Epstein, analyst with Bank of America Merrill Lynch, said in a note to clients Monday. China’s own competitor, the Comac C919, is years away from its public

“While China is crucially reliant on US and European technology for its own aerospace industry, the reverse is not true,” Epstein said. “The majority of Boeing’s aerospace manufacturing is domestic, particularly for critical flight-related technology.”

First Published: Mon, May 13 2019. 23:25 IST
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