Hong Kong shares skid as U.S. slaps tariffs on Europe imports

Hong Kong stocks fell on Thursday, after the United States said it would slap tariffs on $7.5 billion of European Union goods, dampening sentiment across global markets. At midday, the Hang Seng index was down 0.5% at 25,918.51. The Hang Seng China Enterprises index fell 0.3%. The sub-index of the Hang Seng tracking energy shares dipped 0.8%, the IT sector lost 0.1%, the financial sector fell 0.8% and the property sector was down 0.7%.

The top gainer on the Hang Seng was CSPC Pharmaceutical Group Ltd, which climbed 2.4%, while the biggest loser was CK Asset Holdings Ltd, which fell 1.9%. The United States on Wednesday said it would enact 10% tariffs on European-made Airbus planes and 25% duties on French wine, Scotch and Irish whiskeys and cheese from across the continent as punishment for illegal EU aircraft subsidies.

The United States and China have already hiked tariffs on each other's goods in a year-long trade row that has raised the risk of recession and caused major central banks to ease monetary policy. Wall Street slumped overnight and in Asia on Thursday, MSCI's Asia ex-Japan stock index was weaker by 0.7%, while Japan's Nikkei index was down 2.1%. In Hong Kong, anti-government demonstrators clashed with police into the early hours of Thursday, venting their anger over a policeman's shooting and wounding of a teenager earlier in the week, as months of protests show no sign of letting up.

The government said on Wednesday Hong Kong's August retail sales were the worst on record. Retail sales fell 23% from a year earlier, worse than a 21.48% fall in September 1998, according to Refinitiv data. The short and one-factor leveraged Hang Seng index, which is designed to replicate the payoff of a short or leveraged portfolio and is linked to the movements of the Hang Seng Index, was higher by 0.48% on the day at 5,155.63.

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