The risk aversion selloff continued as the Trump administration's move to escalate its trade war with other countries further shook already fragile risk sentiment in global financial markets. Investors feared U.S. President Donald Trump's shock move to slap tariffs on Mexico risked tipping the United States, and maybe the whole world, into recession.Washington will impose a 5per cent tariff from June 10, which would then rise steadily to 25per cent until illegal immigration across the southern border was stopped.
The declines was also fueled after China's manufacturing purchasing managers' index (PMI) -- a gauge of sentiment among factory operators -- disappointed for May, questioning the effectiveness of Beijing's stimulus steps. China's official manufacturing PMI for May fell into contraction territory. April's reading was 50.1, which was only marginally above the threshold for expansion, but May's reading was 49.4, which suggests that manufacturing activity in May actually shrank. The most eye-catching sub-index is the "new orders index", which measures domestic manufacturing activity. This came down drastically from 51.4 in April to 49.8 in May. PMI readings above 50 indicate expansion, while those below that signal contraction.
The official PMI survey typically polls a large proportion of big businesses and state-owned enterprises. A separate survey, the Caixin indicator, features a bigger mix of small- and medium-sized firms. The Caixin manufacturing PMI is due on June 3.
The ongoing trade fight between the U.S. and China also continues to weigh on markets, following a recent escalation in rhetoric. Chinese vice Foreign Minister Zhang Hanhui said Thursday that provoking trade disputes amounted to naked economic terrorism. Also, China has reportedly halted soy purchases from the U.S.
Shares of property developers were lower. Wharf Real Estate Investment (1997 HK) was down 4.64% at HK$53.50; Sun Hung Kai Properties slid 4.4% to HK$124; Henderson Land was down 3.45% at $40.55.
IPO debutant biopharmaceutical company Mabpharm (2181 HK) closed lower than its HK$1.5 offer price, finishing at HK$1.21.
Powered by Capital Market - Live News