Hong Kong Hang Seng finishes 1.06% lower

Headline indices of the Hong Kong share market closed down on Wednesday, 04 July 2018, amid heightened worries about trade frictions as the deadline for the White House to impose the first round of tariffs on Chinese goods draws closer. Planned tariffs on up to $34 billion on Chinese products are set to go into effect on Friday. Beijing is preparing to fight back with equivalent retaliatory measures if the duties come into effect as planned, elevating the current verbal conflict between the world's two largest economies into a real trade war. The Hang Seng Index dropped 303.90 points or 1.06% to 28,241.67. The Hang Seng China Enterprises Index declined 159.56 points or 1.47% to 10,712.64. Turnover decreased to HK$89.1 billion from HK$133 billion on Tuesday.

Companies with the most exposure to the US market were the worst performers on the Hang Seng Index, with Sunny Optical Technology Group and AAC Technologies Holdings shedding at least 3% each.

 

Mainland developers were lower as the government launched nation-wide measures to cool down the property market. Country Garden (02007) plunged 5.8% to HK$12.72. China Overseas Land & Investment (00688) slid 2% to HK$24.96. China Resources Land (01109) fell 1.6% to HK$25.1.

Power producers bucked the trend, with CLP Holdings rising 2 per cent. HK Electric gained 4.4% to HK$7.83. Power Assets (00006) also jumped 1.5% to HK$56.2. CKI Holdings (01038) rose 2.8% to HK$59.95 after Credit Suisse's target price upgrade.

ECONOMIC NEWS: The Land Registry said today the number of sale and purchase agreements for all building units received for registration in June was 9,252, an increase of 18.8% compared with May and an increase of 17.1% from a year earlier.

OFFSHORE MARKET: U.S. stocks closed down in abbreviated trading on Tuesday, 03 July 2018, prior to the US July 4 holiday, with losses in the technology and financial sectors outweighed advances in energy, telecoms and real-estate shares. The Dow Jones Industrial Average fell 112 points, or 0.5%, to close at 24,194. The S&P 500 dropped 12 points, or 0.5%, to end at 2,714 while the Nasdaq Composite Index shed 65 points, or 0.9%, to close at 7,502. The US market is closed on Wednesday for Independence Day holiday.

European share markets rose on Tuesday after German Chancellor Angela Merkel agreed a deal with her Bavarian conservative coalition partners. The STOXX600 index rose by 0.8%, the German Dax rose by 0.9% and the UK FTSE index rose 0.6%.

COMMODITY NEWS: Global oil prices rose on Wednesday, after Libya declared a force majeure on some of its crude exports. Traders also debated whether production would restart at Syncrude's 360,000 barrel a day oil sands facility in Canada after it was hit by a power outage. U.S. light crude futures traded up 0.6% at $74.62 per barrel, after rising above $75 for the first time in more than three years on Tuesday.International benchmark Brent futures stood flat at $77.77.

Base metal prices were mostly lower on the London Metal Exchange (LME) on Tuesday with aluminium and zinc (-1.2%) leading the declines. Copper (-0.6%) fell to 9-month lows on concerns over trade tensions and the spillover to global growth.

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