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Hong Kong Market falls as trade war lingers

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Hong Kong share market closed down on Thursday, 30 May 2019, as risk aversion selloff triggered amid intensifying worries over the US-China rivalry on technology, with tech stocks leading the decline. At closing bell, the Hang Seng Index declined 0.44%, or 120.83 points, to 27,114.88. The Hang Seng China Enterprises Index was up 0.57%, or 59.64 points, to 10,450.09.

The market mood was dented by U. S. shades sliding overnight on concerns over the future course of the global economy.

Beijing and Washington signalled the heightened risk of a prolonged trade war, stoking investors' concerns about the impact on global economic growth. This kind of deliberately provoking trade disputes is naked economic terrorism, economic homicide, economic bullying, China's Vice Foreign Minster Zhang Hanhui said, as Beijing continued to dial up its rhetoric amid the festering trade war with the United States.

China's Vice Foreign Minster Zhang Hanhui comments came after reports that Beijing may cut exports of rare-earth minerals used in the defense and energy sectors to strike back at Washington after US President Donald Trump remarked he was not yet ready to make a deal with China over trade.

Comments from China's official media and business leaders have stoked concerns about the potential economic and business consequences in a prolonged trade war between the two largest economies on earth.

Fu Chengyu, former chairman of the state oil monopoly China Petroleum and Chemical Corp (CNPC), said the country needs to be prepared for an oil supply cut-off in the short term. Fu, a widely respected industry veteran and business leader, said China also needs to become basically self-sufficient in energy over the next 10 to 15 years, in a speech delivered at a forum.

A strident commentary by the Communist Party's mouthpiece publication People's Daily headlined The US shouldn't underestimate China's ability to retaliate raised further concerns among investors.

The US is highly dependent on China's rare earths resources, and China could very well use it as a weapon to retaliate, the commentary said. In a much-noted move, it cited the ancient Chinese saying that roughly translates into don't say we didn't warn you, which is usually regarded as the gravest warning in China's diplomatic language.

Shares of chip makers closed down, as investors took profits from the recent rally powered by optimism that Huawei Technologies' troubles in the US will force China to become more self-sufficient on semiconductors.

Chinese sports apparel maker Anta Sports fell by as much as 12.9% to HK$43.30, after the founder of activist short seller Blue Orca questioned the company's accounting and corporate governance in a public speech today.

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

First Published: Thu, May 30 2019. 17:42 IST
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