Chinese investors get used to Trump’s trade war as benchmark falls the least in Asia
- Hang Seng seeing big fall after trade war tensions escalate but Shanghai ends down only 1.2 per cent
- ‘Chinese investors are getting used to the ongoing noise on the trade front,’ trader says
Chinese stock traders are getting immune to flare-ups of the trade war.
While major stock benchmarks from Japan and South Korea to Taiwan dropped at least 1.6 per cent on Monday after US Donald Trump abruptly said that he will further increase the tariffs on US$550 billion of Chinese goods, China’s Shanghai Composite Index slid by 1.2 per cent at the close.
The reaction was pretty muted in comparison with earlier times that the Trump administration unveiled tariff measures against China.
The Shanghai Composite tumbled 5.6 per cent on May 6 after the White House more than doubled tariffs on US$200 billion of Chinese imports and threatened more duties. The gauge slumped 3.8 per cent on June 19 last year after Washington first announced it was slapping duties on the Chinese goods.
“Chinese investors are getting used to the ongoing noise on the trade front,” said Gerry Alfonso, director of the international business department of Shenwan Hongyuan Group in Shanghai. “The equity market was clearly impacted. But it has been such a long process that local investors are, at least to some degree, learning to live with that uncertainty, with stocks already pricing in that risk.”