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Hong Kong Market sinks after Trump vows China tariff hike

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Hong Kong share market closed down on Monday, 06 May 2019, on renewed worries about U. S.-China trade talks after U. S. President Donald Trump unexpectedly jacked up pressure on China to reach a trade deal in the midst of negotiations, saying he would hike U. S. tariffs on Chinese goods this week. At closing bell, the Hang Seng Index tanked 2.9%, or 871.73 points, to 29,209.82. The Hang Seng China Enterprises Index tumbled 2.95%, or 341.39 points, to 11,233.66. Turnover more than doubled to HK$137.3 billion from HK$66.7 billion on Friday.

Sentiment quickly turned sour as Trump said over the week that the US would increase tariffs on US$200 billion of Chinese goods to 25 per cent from 10 per cent starting Friday, complaining the trade negotiation between Washington and Beijing was progressing too slowly. He also threatened to impose a new 25 per cent duty on the remaining US$325 billion of imports from the Asian nation. The two sides earlier agreed to a truce in December following a meeting between Trump and his Chinese counterpart Xi Jinping in Argentina.

Trump's latest threat to raise tariffs on Chinese exports to pressure Beijing to make more concessions appears to reflect that his administration is seeking a harder line in response to domestic political pressures.

Blue chips fell across the board.

HSBC (00005) sank 2.6% to HK$67.9. HKEX (00388) slipped 4.4% to HK$266 ahead of its earnings report on 8 May. Tencent (00700) fell 3.2% to HK$375.6. China Mobile (00941) softened 0.5% to HK$73.9. AIA (01299) shed 3.6% to HK$80.45.

Packaged meats producer WH Group (00288) plunged 6.8% to HK$8.44 on looming trade war. COFCO Meat (01610) declined by 5.6% to HK$3.2. China Yurun Food (01068) dropped 6.9% to HK$1.35.

Export counters also saw intense selling pressure. Techtronic Industries (00669) tumbled 8.4% to HK$55.3. Shenzhou International (02313) dropped 4.6% to HK$102.7. Man Wah Holdings (01999) waned 8.3% to HK$3.86.

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

First Published: Mon, May 06 2019. 15:42 IST
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