SHANGHAI: Mainland China stocks pared gains and closed largely flat on Wednesday, weighed by persistent worries over a possible escalation in global trade tensions, while auto shares drove Hong Kong market higher.
At the close, the Shanghai Composite index was down 0.04% at 3,368.70 points, while the blue-chip CSI300 index lost 0.3%.
In Hong Kong, the benchmark Hang Seng index rose 0.6% to 23,483.32 points, and the Hang Seng China Enterprises index rose 0.44% to 8,654.26.
Sino-US trade relations have been front and centre of investors’ minds, especially with the US on track to impose reciprocal tariffs on a number of trading partners on April 2.
US President Donald Trump is considering a two-step approach to his new tariff regime next week, the Financial Times reported, citing unnamed sources.
“China was the primary target of US tariffs previously but most US trading partners could see higher tariffs in Trump’s second term,” Goldman Sachs said in a note published on Wednesday, following meetings with Asian, US and European investors in the past month.
“Some investors believe that China appears better placed to deal with the external demand headwinds now, compared to the Trade War 1.0 seven years ago, thanks to its reduced direct exports to the US and improved product competitiveness.” Morgan Stanley raised its index targets for Chinese shares for the second time this year, citing improved earnings growth forecasts and a more optimistic outlook for the economy and currency.
The US added six subsidiaries of Inspur Group, China’s leading cloud computing and big data service provider, and dozens of other Chinese entities to its export restriction list on Tuesday.
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