Hong Kong stocks close lower on Sino-U.S. tensions

** Leading the decline, the Hang Seng financials index fell 1.7%. ** The United States is preparing to impose sanctions on at least a dozen Chinese officials over their alleged role in Beijing's disqualification of elected opposition legislators in Hong Kong, according to three sources, including a U.S. official, familiar with the matter.

Hong Kong stocks fell more than 1% on Monday, dragged down by losses in the financial sector, as investors worried over rising U.S.-China tensions.

** The Hang Seng index fell 1.2% to 26,506.85, while the China Enterprises Index lost 1.4% to 10,473.32 points. ** Leading the decline, the Hang Seng financials index fell 1.7%.

** The United States is preparing to impose sanctions on at least a dozen Chinese officials over their alleged role in Beijing's disqualification of elected opposition legislators in Hong Kong, according to three sources, including a U.S. official, familiar with the matter. ** The news came after the United States on Thursday added China's top chipmaker, SMIC, and oil giant CNOOC to a blacklist of alleged Chinese military companies.

** China said on Monday it firmly opposes and strongly condemns U.S. interference in its domestic affairs if a media report that Washington is preparing new sanctions on Chinese officials over a Hong Kong crackdown is true. ** "People just started to think the targets of the U.S. sanctions would be Chinese banks or financial institutions," said Steven Leung, executive director at UOB Kay Hian.

** He said some investors also booked profits after a sharp rally in financial companies in the previous month. ** The Hang Seng financials index rose 15% in November, buoyed by China's continued economic recovery and progress on a COVID-19 vaccine.

** Helping limit losses on Monday, customs data showed that China's exports in November rose 21.1% from a year earlier, after 11.4% growth in October, while imports grew 4.5% last month, having increased by 4.7% in October. ** Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.83%, while Japan's Nikkei index closed down 0.76%.

** The yuan was quoted at 6.537 per U.S. dollar at 0826 GMT, 0.11% weaker than the previous close of 6.53.

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