Chinese stocks fall as new US-imposed tariffs kick in; property firms plunge
China's stock markets fell on Tuesday morning in their first trading session after fresh U.S. tariffs on $200 billion worth of Chinese imports kicked in on Monday, prompting retaliatory tariffs on $60 billion of U.S. imports to China. At the midday break, the Shanghai Composite index was down 21.15 points or 0.76 percent at 2,776.33. China's blue-chip CSI300 index was down 1.12 percent, with its financial sector sub-index lower by 1.7 percent, the consumer staples sector down 1 percent and the healthcare sub-index down 0.13 percent.
Chinese property developers plunged, with the real estate sub-index losing 4.5 percent after six provinces were told to decide whether to retain or scrap a property pre-sale system that enables developers to secure funds before project completion. Property shares had fallen sharply in Hong Kong on Monday on the prospect of the system being scrapped. The United States and China imposed fresh tariffs on each other's goods on Monday as the world's biggest economies showed no signs of backing down from an increasingly bitter trade dispute that is expected to hit global economic growth.
A senior Chinese official said on Tuesday that it is difficult to proceed with trade talks with the United States while Washington is putting "a knife to China's neck", a day after both sides heaped fresh tariffs on each other's goods. Chinese H-shares listed in Hong Kong fell 1.81 percent to 10,827.52, while the Hang Seng Index was down 1.62 percent at 27,499.39. The smaller Shenzhen index was down 0.68 percent and the start-up board ChiNext Composite index was weaker by 0.46 percent.
Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.23 percent while Japan's Nikkei index was up 0.16 percent. The yuan was quoted at 6.8633 per U.S. dollar, 0.05 percent weaker than the previous close of 6.86. The largest percentage gainers in the main Shanghai Composite index were Guanghui Logistics Co Ltd, up 10.1 percent, followed by Ningbo Heli Mould Technology Co Ltd, gaining 10.03 percent and China Grand Automotive Services Co Ltd, up by 10.02 percent. The largest percentage losses in the Shanghai index were HNA Technology Co Ltd, down 10.04 percent, followed by HNA Technology Co Ltd, losing 10.02 percent and A-Zenith Home Furnishings Co Ltd, down by 10.01 percent.
So far this year, the Shanghai stock index is down 15.41 percent, while China's H-share index is down 7.5 percent. Shanghai stocks have risen 2.65 percent this month. The top gainers among H-shares were CNOOC Ltd, up 0.57 percent, followed by Guangdong Investment Ltd, gaining 0.15 percent. The three biggest H-shares percentage decliners were Great Wall Motor Co Ltd, which has fallen 5.06 percent, China Resources Land Ltd, which has lost 4.8 percent and Air China Ltd, down by 4.6 percent.
About 7.24 billion shares have traded so far on the Shanghai exchange, roughly 65.6 percent of the market's 30-day moving average of 11.03 billion shares a day. As of 04:17 GMT, China's A-shares were trading at a premium of 20.18 percent over the Hong Kong-listed H-shares. The Shanghai stock index is above its 50-day moving average and below its 200-day moving average. The price-to-earnings ratio of the Shanghai index was 11.83 as of the last full trading day, while the dividend yield was 2.7 percent.
In Hong Kong, the sub-index of the Hang Seng index tracking energy shares dipped 0.7 percent while the IT sector fell 1.8 percent. The top gainer on Hang Seng was CNOOC Ltd, up 0.57 percent, while the biggest loser was Country Garden Holdings Co Ltd, which was down 5.57 percent.