China’s stocks dropped for a second day, erasing most of the gains in July, after President Donald Trump said the US is considering more than doubling the tariff rates on the proposed US$200 billion worth of Chinese goods, escalating a trade…
China’s stocks dropped for a second day, erasing most of the gains in July, after President Donald Trump said the US is considering more than doubling the tariff rates on the proposed US$200 billion worth of Chinese goods, escalating a trade dispute between the world’s two largest economies.
The Shanghai Composite Index slid 2.5 per cent at the break on Thursday, extending a 1.8 per cent drop a day earlier. The sell-off put the benchmark of the mainland’s equities less than 1 per cent shy of a 28-month low set on July 5 after the White House said it is assessing a plan to increase the duties to 25 per cent from 10 per cent, which will probably come into effect as early as next month.
Hong Kong’s Hang Seng Index also fell and is bound for a fourth straight day of declines.
Traders are offloading their holdings of Chinese stocks even after Beijing has started counter measures to cushion a possible slowdown from its trade friction with the US. Policymakers have pledged to spend more on infrastructure projects, fine-tune monetary policies and ease off on financial deleveraging.
Further Reading: Bears and short-sellers dare not wade into China’s equity slump for fear of regulator’s wrath
“It’s a loss of confidence among investors, who are worried that all the measures rolled out by the Chinese government aren’t enough to offset the impact of the trade war,” said Wu Kan, a fund manager at Shanshan Finance in Shanghai.
