China and Hong Kong stocks slip as gold shares drag, lingering trade tensions in focus

SHANGHAI: Stocks in mainland China and Hong Kong slipped on Wednesday, dragged by gold shares, while sentiment was dampened by lingering trade tensions between the world’s two largest economies.

• At the midday break, the Shanghai Composite index was down 0.44% at 3,899.05 points, while the blue-chip CSI300 index lost 0.7%.

• Gold stocks were among the biggest losers in morning deals, following plunging gold prices in global markets, with the CSI non-ferrous metal industry sub-index falling 2.1%. Western Region Gold slumped 6.03% by midday break.

• The precious metal has had a blockbuster run this year, climbing more than 50% as broader geopolitical and economic uncertainty, as well as expectations of US interest rate cuts, spurred demand for the safe-haven asset.

• US President Donald Trump said he will discuss a lot of things with his Chinese counterpart Xi Jinping in two weeks, but also conceded that the potential meeting may not happen.

• In Hong Kong, the benchmark Hang Seng Index dropped 1.27% at 25,697.57 points, while the city’s tech index fell 2.12%.

• Meanwhile, some global investment banks said they no longer expect major monetary stimulus measures in the remainder of this year.

• “China could still be on track to hit its ‘around 5%’ growth target with the growth achieved in the first three quarters of this year,” Citi analysts said in a note. “With smaller room to cut for the People’s Bank of China, we no longer expect a policy rate cut or reserve requirement ratio (RRR) cut in the fourth quarter. Meanwhile, the focus could be on deployment of fiscal and quasi-fiscal policies.”

• Analysts at Standard Chartered said they expect another 10-basis-point rate cut in the fourth quarter, with “risk that the rate cut may not happen this year.”