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China Market falls on Sino-U.S. dispute

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Capital Market
Last Updated : May 24 2019 | 2:31 PM IST
The Mainland China equity market closed down on Thursday, 23 May 2019, as uncertainty over the ongoing trade conflict between the United States and China continued to sour investors. At closing bell, the benchmark Shanghai Composite Index declined 1.4%, or 39.2 points, to 2,852.51.

Mainland A-shares were seen pressured by US-China trade and tech disputes. The U.S.-China trade spat is showing no signs of ending, with media also reporting that Washington was considering blocking video surveillance giant Hangzhou Hikvision Digital Technology Co. and several other Chinese firms from buying U.S. technology, which sparked fresh worries that the trade conflict was spiralling into a technology cold war.

After last week's escalation of tariffs, no new trade talks have been scheduled, and many analysts suspect a breakthrough will require an intervention at the top before the Group of 20 major economies meets next month in Osaka, Japan.

Shares of Chinese operators of container ports fell, after Moody's Investors Service wrote that the US-China trade war will strangle growth in the throughput traffic in mainland China, where six of the world's 10 largest harbours sit on its coast. Shanghai International Port Group (600018 CH) declined by 3% to 7.16 yuan.

CURRENCY NEWS: China's yuan declined against the U.S. dollar on Thursday, amid the intensifying Sino-U.S. dispute, despite Chinese central bank's firm midpoint fixing and verbal intervention. The PBOC set the midpoint rate at 6.8994 per dollar prior to market open, a touch weaker than the previous fix of 6.8992. Spot yuan fell to 6.9190 per dollar, registering its weakest onshore close since November 30, 2018. But it quickly pared some of those losses after PBOC Deputy Governor Liu Guoqiang said in published remarks that China has ample reserves, policy tools and confidence to keep the yuan exchange rate stable.

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First Published: May 23 2019 | 2:08 PM IST

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