Stocks

China stocks fall as trade war fears hit investor sentiment

Reuters Shanghai | Updated on September 12, 2018 Published on September 12, 2018

China told the World Trade Organization (WTO) on Tuesday it wanted to impose $7 billion a year in sanctions on the United States in retaliation for Washington's non-compliance with a ruling in a dispute over US dumping duties.   -  AFP

Hang Seng hits lowest level since July 2017

China stocks fell on Wednesday morning, dragging the Shanghai Composite and the blue-chip CSI300 indexes down to new multi-year lows, as worries over escalation in the US-China trade war hit investor sentiment, with China seeking WTO sanctions.

At the midday break, the Shanghai Composite index was down 8.91 points or 0.33 per cent at 2,655.89. It fell as low as 2,647.17 in the morning session, its lowest point since February 29, 2016.

China's blue-chip CSI300 index was down 0.61 per cent at midday, having earlier touched its lowest point since August 8, 2016. The CSI300 financial sector sub-index was lower by 0.4 per cent, the consumer staples sector down 1.69 per cent, the real estate index down 0.76 per cent and the healthcare sub-index down 2.26 per cent.

Chinese H-shares listed in Hong Kong fell 0.95 per cent to 10,234.64, while the Hang Seng Index was down 0.4 per cent at 26,317.89. The Hang Seng earlier touched its lowest intraday level since July 12, 2017.

China told the World Trade Organization (WTO) on Tuesday it wanted to impose $7 billion a year in sanctions on the United States in retaliation for Washington's non-compliance with a ruling in a dispute over US dumping duties. Chinese Vice Premier Hu Chunhua said on Wednesday countries should “categorically reject” protectionism in trade.

The smaller Shenzhen index was down 0.15 per cent and the start-up board ChiNext Composite index was weaker by 0.18 per cent.

Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.34 per cent, while Japan's Nikkei index was down 0.39 per cent. The yuan was quoted at 6.8757 per US dollar, 0.06 per cent weaker than the previous close of 6.8719.

The largest percentage gainers in the main Shanghai Composite index were Will Semiconductor Co Ltd Shanghai, up 10.01 per cent, followed by Guizhou Guihang Automotive Components Co Ltd, gaining 10 per cent and Zhejiang Rongsheng Environmental Protection Paper Joint Stock Co Ltd, up by 10 per cent.

The largest percentage losses in the Shanghai index were Harbin Gong Da High-Tech Enterprise Development Co Ltd , down 4.92 per cent, followed by Dynagreen Environmental Protection Group Co Ltd, losing 4.71 per cent and Yifeng Pharmacy Chain Co Ltd, down by 4.46 per cent.

So far this year, the Shanghai stock index is down 19.42 per cent, while China's H-share index is down 11.8 per cent. Shanghai stocks have declined 2.22 per cent this month. The top gainers among H-shares were Great Wall Motor Co Ltd , up 5.17 per cent, followed by China Resources Land Ltd , gaining 1.6 per cent and CNOOC Ltd, up by 1 per cent.

The three biggest H-shares percentage decliners were CSPC Pharmaceutical Group Ltd, which has fallen 6.92 per cent, China Pacific Insurance Group Co Ltd, down 2.4 per cent and Huaneng Power International Inc, which was 2.2 per cent lower.

About 5.11 billion shares have traded so far on the Shanghai exchange, roughly 43.2 per cent of the market's 30-day moving average of 11.83 billion shares a day. The volume traded was 9.99 billion as of the last full trading day.

As of 04:16 GMT, China's A-shares were trading at a premium of 21.06 per cent over the Hong Kong-listed H-shares. The Shanghai stock index is below its 50-day moving average and below its 200-day moving average.

The price-to-earnings ratio of the Shanghai index was 11.21 as of the last full trading day, while the dividend yield was 2.8 per cent. So far this week, the market capitalisation of the Shanghai stock index has fallen by 1.34 percent to 28.39 trillion yuan.

In Hong Kong, the sub-index of the Hang Seng index tracking energy shares dipped 0.1 per cent, while the IT sector rose 0.2 per cent. The top gainer on Hang Seng was MTR Corp Ltd, up 2.77 per cent, while the biggest loser was Sino Biopharmaceutical Ltd, which was down 10.16 per cent.

Published on September 12, 2018
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