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Hong Kong Market tumbles over protest, trade war issues

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The Hong Kong share market finished session lower on Monday, 26 August 2019, as risk aversion selloff triggered as market players became more worried about the global economic outlook, after the United States and China unveiled new tariffs. Adding to the risk-off sentiment, Hong Kong police and protesters clashed for a 12th weekend and China sent the strongest warning yet it's thinking of using troops on the city's streets. Every sectors closed firmly in negative territory, with energy, materials, and technology issues being notable losers, At closing bell, the Hang Seng Index declined 1.91%, or 499 points, to 25,680.33. The Hang Seng China Enterprises Index sank 1.78%, or 181.22 points, to 10,013.51.

The sell-off in city market triggered after the US markets sunk over the weekend upon yet another escalation in the US-China trade war. The US President Donald Trump announced a 5% additional duty on $550 billion in targeted Chinese goods, hours after China unveiled retaliatory tariffs on $75 billion worth of U. S. products with new tariffs and hikes to existing duties.

On Friday, the US said it would begin the process of raising tariffs on around $250 billion of Chinese imports from 25% to 30%. Those hikes will be introduced from 1 October. The US also said fresh tariffs on an additional $300 billion of Chinese goods, announced earlier this month, will now be at a rate of 15% instead of 10%. The first batch of those tariffs will be introduced in September. In a tweet, Mr Trump said he planned to order US firms working in China to move their operations back to the US. It is unclear how he could force firms to comply.

The world's two largest economies have been locked in a bruising trade battle for the past year that has seen tariffs imposed on billions of dollars worth of one another's goods. Mr Trump has long accused China of unfair trading practices and intellectual property theft. In China, there is a perception that the US is trying to curb its rise.

Global markets are closely watching for any further economic support measures from Beijing as a bruising trade war with the United States saps confidence, business profits and overall growth.

Blue chips fell across the board. HSBC (00005) slipped 1.6% to HK$56.2. HKEX (00388) fell 2.1% to HK$247.

Tencent (00700) sank 2.5% to HK$326. China Mobile (00941) shed 0.6% to HK$66.4. AIA Group (01299) declined by 2.9% to HK$75.5.

WH Group (00288) plunged 6.4% to HK$6.14 amid the rising trade war between the world two biggest economies. Other exporters were also the selling targets today. Techtronic Industries (00669) weakened 3.4% to HK$53.3. Shenzhou International (02313) dropped 2.8% to HK$109.8. Minth Group (00425) descended 4.1% to HK$22.35.

Handset component suppliers also bore the brunt of the war. Sunny Optical (02382) retreated 0.9% to HK$104.1. BYD Electronic (00285) dipped 4.2% to HK$10.12. Q Technology (01478) slipped 2.6% to HK$7.22. FIT Hon Teng (06088) softened 1.2% to HK$3.39.

AAC Technologies (2018 HK) tumbled 5.4% to HK$34.95, after brokerage house Jefferies downgraded its rating for the company to hold from buy, with its 12-month price target lowered to HK$40 from HK$56. This was after the manufacturer of miniaturized components used in smartphones and speakers reported on Friday that its first-half net profit had dropped 57% year-on-year to 770 million yuan and revenue fell 10% year-on-year to 7.57 billion yuan.

Meituan Dianping (3690 HK) rose 6.7% to HK$74.7, after posting better than expected earnings results. The online food delivery-to-ticketing platform saw its profit for the three months ending in June come in at 875.8 million yuan, compared to a net loss of 7.7 billion yuan a year ago. Total revenue rose more than half to 22.7 billion yuan. Its food delivery business achieved the first positive operating profit, as the segment's gross transaction volume rose by 36.5% to 93.1 billion yuan from a year ago.

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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, August 26 2019. 17:25 IST
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