China’s stocks endure longest losing stretch in two months as trade war dims growth prospect
- Mainland shares fall before MSCI’s announcement on weighting increases for Chinese stocks and release of July trade data
- CLP was the best performer on the Hang Seng Index as the city’s power supplier seeks to make a foray into the Chinese market
China’s stocks fell on Wednesday, with the benchmark gauge capping its longest run of declines in the past two months, as the US-China trade tension weighs on the growth outlook.
The Shanghai Composite Index dropped 0.3 per cent to 2,768.68, capping a sixth straight day of declines and matching a similar stretch that ended on June 6. Hong Kong’s Hang Seng Index rose 0.1 per cent to 25,997.03, snapping a five-day loss.
Mainland stocks traded sideways for most of the day before closing lower again, with companies linked to the Shanghai Free Trade Zone tumbling after plans were unveiled on Tuesday to expand the special enclave.
“Investors should take Trump at his word that he will move forward with the next round of tariffs on China,” said Libby Cantrill, head of public policy at Pacific Investment Management with US$1.76 trillion in assets under management. “Indeed, we see trade conflict and politics as ongoing risks for the markets and reasons to maintain defensive positioning overall.”
