Chinese meme stocks like ‘Trump Wins Big,’ ‘Cutting Ears’ soar as US shooting sours mood
- Investors worry about universal tariffs, while meme stocks have their day after assassination attempt on US Presidential candidate Donald Trump
The shooting, which pierced Trump’s right ear and left one spectator dead in a campaign event in Pennsylvania over the weekend, has boosted the odds of his second presidency to 70 per cent from 60 per cent, according to a public poll. Trump said earlier that he would impose tariffs on all Chinese imports at 60 per cent if elected, and analysts said his policies favouring a stronger US dollar and trade protectionism would trigger outflows from Asian markets.
The Hang Seng Index dropped 1.5 per cent for the biggest loss in a week on Monday, and the technology-heavy Shenzhen Composite Index slid 0.8 per cent, while benchmarks in Taiwan and Thailand also headed south. The onshore yuan weakened 0.2 per cent against the US dollar to 7.2607 per dollar.
“If the assassination attempt improves Donald Trump’s electoral prospects as dramatically as pundits seem to be suggesting, markets may be underpricing the consequences of universal tariffs and a potential curtailing of Fed independence,” said Benjamin Picton, a strategist at Rabobank.
Analysts said that the return of Trump as US President could see aggressive policies against Chinese companies via tariffs and sanctions. This could hurt China’s exports, one of the few bright spots in the world’s second-largest economy this year when overseas shipments recorded growth in four out of the first six months.