China stocks fall on Christmas after Japan’s Nikkei enters bear market, another day of losses in US
- Companies related to fifth-generation mobile communications, or 5G, rally for second day
Shares listed in mainland China fell on Tuesday, tracking the steep losses in markets in Japan and the United States triggered by an intensifying row between the White House and the US Federal Reserve. The Hong Kong market will remain closed until Thursday.
The Shanghai Composite Index dropped by as much as 2.5 per cent during the day before paring some of the losses to close 0.9 per cent, or 22.19 points, lower at 2,504.82. The decline follows a Wall Street bloodbath on Monday, in which a 2.7 per cent decline at the close bought the S&P 500 to the brink of bear market territory.
US President Donald Trump’s ongoing attacks on the Federal Reserve have made investors worry he may seek further control over the central bank, after he called the Fed the “only problem our economy has” in a tweet on Monday.
Japan’s Nikkei 225 Index plummeted into bear territory on Tuesday, falling by 5 per cent to cap a 21 per cent decline since October.
“The market is pressured by the declines in overseas markets,” said Wei Wei, a trader at Huaxi Securities in Shanghai. Bulk buying of large-cap insurance stocks seen in the market suggests Chinese state funds may have moved to stabilise the market, said Wei.
Securities brokerages were among the biggest losers, after an announcement by Citic Securities that it would buy smaller peer Guangzhou Securities prompted worries over competition and survival in the industry. Guoyuan Securities fell by 4.4 per cent to 7.03 yuan and CSC Financial dropped by 4 per cent to 8.95 yuan.
Companies related to fifth-generation mobile communications, or 5G, rallied for a second day. Telecoms giant Huawei vowed on Tuesday to push forward with its 5G business even though countries around the world were banning its 5G infrastructure and equipment.
Seven telecoms companies, including Allwin Telecommunication and Guangdong Super Telecom, jumped by the daily limit of 10 per cent.