Hong Kong stocks extended losses into a second session Wednesday, as US-China tensions grew over what Beijing sees as meddling in its internal affairs and President Donald Trump signalled a trade deal might not happen until after US elections next November.
The Hang Seng Index lost 1.3 per cent to 26,062.56, with 48 of the 50 constituent stocks posting losses.
China markets, driven largely by retail investors who are less focused on international catalysts, were mixed.
The Shanghai Composite Index fell 0.2 per cent to 2,878.11, while the Shenzhen Component Index rose 0.3 per cent to 9,687.95.
Tensions escalated between China and the US after the US House of Representatives passed legislation imposing sanctions on individuals involved in the mass internment of Muslims in the country’s Xinjiang Uygur autonomous region.
The bill would also toughen export controls on exports of US technology that could be used to “suppress individual privacy, freedom of movement and other basic human rights”.
China shot back that the bill “deliberately defames the human rights situation in Xinjiang and discredits Beijing’s efforts to fight against extremism and terrorism in the region”.
“We warn the US that Xinjiang is China’s internal affairs and has no room for foreign forces,” a statement by the Chinese foreign ministry said.
This came after Beijing anger over Trump signing two bills supporting anti-government protesters in Hong Kong.
Meanwhile, overnight, Trump said he was in no rush for a US-China trade deal, saying, “I just tell you, in some ways, I like the idea of waiting until after the election for the China deal, but they want to make a deal now and we’ll see whether or not the deal is going to be right, it’s gotta be right.”
Gold-linked stocks jumped in Hong Kong and the mainland as trade tensions increased appetite for the safe haven asset.
In Hong Kong, China Silver Group shot up 12 per cent, Shandong Gold Mining rose 8.9 per cent, and Zhaojin Mining Industry advanced 6.6 per cent.
“The Americans have got the upper hand in the trade deal,” said Louis Tse Ming-kwong, managing director of VC Asset Management, describing global trade frictions in the Trump era “quite disturbing.”
The worst performers of blue chips were AAC Tech, which declined 3.7 per cent, and Sunny Optical, which fell 3.5 per cent.
Losing sectors included retail, which fell 1.3 per cent, coal, which declined 1.2 per cent, and property, which declined 0.9 per cent.
Meanwhile, Alibaba fell 1.9 per cent to HK$189 per share, racking up its fourth straight day of losses since its debut Tuesday a week ago.
Cosmetics chain Sa Sa International fell 1.8 per cent to HK$1.66, in its seventh straight session of declines. Its business has been hard hit by Hong Kong protests.
In the mainland, liquor stocks were among winners, with a gauge tracking leading companies gaining 1 per cent, after a draft of the consumption tax law left taxes on liquor unchanged.
Liquor giant Kweichow Moutai rose 0.4 per cent to 1,122.33 yuan.
Wuliangye Yibin gained 1.9 per cent to 128.45 yuan, Anhui Golden Seed Winery shot up to the daily upside 10 per cent limit and closed at 6.22 yuan, Luzhou Laojiao rose 1.7 per cent to 81.72 yuan, and Hengshui Laobaigan climbed 2.4 per cent to 11.20 yuan.
Pork stocks fell 1 per cent and chicken stocks declined 1.2 per cent, according to gauges tracking them, as the Ministry of Agriculture signalled that the worst may be over for the devastating African swine fever.
Of pork stocks, Henan Shuanghui dropped 6.0 per cent, and Wens Foodstuff fell 2.8 per cent.
In Hong Kong, WH Group, the world’s biggest pork producer, fell 1.9 per cent to HK$7.82.
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