Hong Kong Market falls amid trade war fears

Hong Kong share market closed session lower on Tuesday, 03 July 2018, as trading resumed after a one-day hiatus on Monday to mark the day that the former British colony was returned to China. The risk aversion selloff triggered across the board, with forty-seven of the 50 blue-chip stocks fell as Chinese currency took another beating, with traders gripped by fears of an all-out trade war of China with the US, and worried about the dimming outlook for the Chinese economy. The Hang Seng Index ended down 409.54 points or 1.41% to 28,545.57. The Hang Seng China Enterprise index fell 200.80 points or 1.81% to 10,872.20. Full-day turnover increased to HK$70.7 billion from HK$48 billion on Monday.

China's yuan dipped past 6.7 per dollar on Tuesday for the first time in almost a year, and stocks stumbled anew as Beijing and Washington hurtled toward an end-of-week deadline that would trigger tariffs on goods going both ways. Chinese currency and stock markets have been jittery ahead of July 6, when US tariffs on $34 billion worth of Chinese goods kick in. Beijing has said it would retaliate with tariffs on US products. The yuan fell to 6.7204 per dollar, its weakest since Aug. 7, 2017 and the first time it dropped below 6.7 since Aug. 9, 2017, before recovering to 6.6923 per dollar

 

Chinese financial shares fell sharply across the board, with Ping An Insurance, China Construction Bank, ICBC, and Citic Securities was off in between 3% to 6%.

Property developers Country Garden and China Resources Land, Macau gaming companies Galaxy Entertainment and Sands China, and snack food and drink supplier Want Want China, all sank more than 6%.

On economic news, Hong Kong's value of total retail sales in May, provisionally estimated at HK$40.5 billion, rose 12.9% over the same month in 2017, according to the Census and Statistics Department. The revised estimate of the value of total retail sales in April grew 12.2% over a year earlier. For the first five months of 2018 taken together, it was provisionally estimated that the value of total retail sales increased 13.7% over the same period in 2017. After netting out the effect of price changes over the same period, the provisional estimate of the volume of total retail sales in May expanded 11.6% over a year earlier. The revised estimate of the volume of total retail sales in April grew 11% over a year earlier. For the first five months of 2018 taken together, the provisional estimate of the total retail sales increased 12.2% in volume over the same period in 2017.

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