Democrats take US House, weakening the hand of the Republican president who has launched a trade war against China
Hong Kong and China markets were little changed in trading Wednesday as traders tried to assess the fallout from the US midterm elections – in which Democrats won the House and Republicans retained the Senate – on stocks that have been hammered by the US-China trade war.
The China and Hong Kong markets often take their cues from overnight moves in America. So Thursday could see far more reaction.
Benchmarks in China and Hong Kong – where many Chinese companies are listed – are down substantially this year, by more than 19 per cent and nearly 12 per cent, respectively. While many factors are responsible, there is no doubt that the trade war has weighed down investor appetite for China-related stocks with fortunes tied to exports.
“The midterm election result will help investors around the world to regain their appetite for risk assets, but that will take time and a big rebound isn’t going to happen overnight,” said Chen Hao, a strategist at KGI Securities in Shanghai. “The Trump administration has started the trade war with China and advocates anti-globalisation. And all these things have been regarded as a major threat to global growth and creating policy uncertainty.
