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China: Stocks tumble 1.8% as US ramps up trade row, threatens new tariffs

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Headline indices of the Mainland equity market tumbled on Wednesday, 11 July 2018, amid an escalating trade spat between the and after the release of a list of an additional $200 billion in Chinese goods on which the U. S. is considering imposing tariffs. At the close, the benchmark Composite Index dropped 1.8%, or 49.85 points, to 2,777.77, meanwhile the Composite Index, which tracks stocks on China's second exchange, fell 2%, or 31.16 points, to 1,554.62. The blue-CSI300 index slipped 1.7%, or 60 points, to 3,407.53.

The government decided to impose the extra tariffs after efforts to negotiate a solution to the dispute failed to reach an agreement. The raised the stakes in its trade war with on Tuesday, saying it would slap 10% tariffs on an extra $200 billion worth of Chinese imports.

U. S. officials released a list of thousands of Chinese imports the administration wants to hit with the new tariffs, including hundreds of as well as tobacco, chemicals, coal, and aluminum. It also includes consumer goods ranging from car tires, furniture, wood products, handbags and suitcases, to dog and cat food, baseball gloves, carpets, doors, bicycles, skis, golf bags, toilet paper and

Last week, imposed 25% tariffs on $34 billion of Chinese imports, drawing immediate retaliatory duties from on US imports in the first shots of a heated trade war. US had warned then that his country may ultimately impose tariffs on more than $500 billion worth of Chinese imports.

The news sent stocks tumbling, and prompted a senior Chinese to warn that the was harming the global trade order.

Shares of technology and property developers paced the declines on the mainland and in Hong Kong. Certificate Authority fell by the 10% daily limit to 27.57 yuan in and slumped by 8.9% to 13.48 yuan.

Shares of Tesla's Chinese suppliers defied the downward trend in the broader market, after the US manufacturer of electrical vehicles said it will set up a Gigafactory in with an annual output of 500,000 units. Kedali Industry surged by the 10% daily cap to 29.57 yuan and jumped by 10% to 33.77 yuan. Baolong Automotive added 7.4% to 29.46 yuan.

ECONOMIC NEWS:- China's inflation accelerated to a six-month high in June, lifted by strong commodity prices and threatening to put more pressure on the country's exporters amid Sino-U. S. trade tensions.

Annual consumer inflation also edged up as rose at a faster pace, official data showed. The price index (PPI) a gauge of industrial profitability rose 4.7% in June from a year earlier, compared with a 4.1-percent increase in May, according to the On a month-on-month basis, the rose 0.3% in June, compared with 0.4-percent growth in May. The consumer price index (CPI) rose 1.9% in June from a year earlier. On a month-on-month basis, the CPI fell 0.1%. The core consumer price index, which strips out and energy prices, was unchanged at 1.9% in June.

CURRENCY NEWS: The Chinese yuan was down against the dollar on Wednesday, despite fixed stronger mid-point rate amid escalation of the trade conflict. Washington's latest move, which comes just days after both countries imposed tit-for-tat tariffs on $34 billion of each other's goods, ups the ante in a heated trade dispute that has rattled global financial markets. The central parity rate of the Chinese currency renminbi, or the yuan, strengthened 25 basis points to 6.6234 against the U. S. dollar Wednesday, according to the The onshore yuan opened at 6.6694 per dollar and was changing hands at 6.6660. The offshore yuan was at 6.6726 per dollar after hitting a low of 6.6918, down nearly 0.5% on day at one point in Asian trade.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, July 11 2018. 16:03 IST
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