SHANGHAI: China and Hong Kong stocks ended lower on Thursday, with key mainland gauges snapping their four-day winning streak, as investors grew cautious and weighed the potential impact from the upcoming US presidential election.
The growing bets of a possible second Donald Trump presidency and higher trade tariff threats have dampened market sentiment, investors and analysts said.
“In the betting markets, Trump-over-Harris spread has widened sharply in favour of Trump,” said Christopher Wong, FX strategist at OCBC Bank.
“And that brings back worries of tariffs, inflation and fiscal concerns... A Trump outcome may see a play-up of US-China trade tensions and should inject some uncertainty into markets.” At the close, the Shanghai Composite index was down 0.68% at 3,280.26 points, while the blue-chip CSI300 index was down 1.12%. Both indexes snapped their four-day winning streak.
The financials sub-index fell 0.47%, the consumer staples sector lost 1.51%, the real estate index dropped 1.95% and the healthcare sub-index shed 1.37%.
In Hong Kong, Chinese H-shares, the Hang Seng China Enterprises Index fell 1.59% to 7,359.14 points, while the Hang Seng Index was down 1.3% at 20,489.62.
Tech stocks were among the biggest losers in Hong Kong, with the Hang Seng Tech index plunging 2.64%.
The US-China tech war is all but certain to heat up no matter whether Republican Donald Trump or Democratic Vice President Kamala Harris wins the Nov. 5 election, with the Democrat likely to come out with targeted new rules and Trump a blunter approach.
“With the US election less than two weeks away, portfolio managers need to be wary of potential market volatility driven by the binary outcome of either a Harris victory (status quo) or Trump victory (near-term dollar strength),” said Eugene Hsiao, head of China equity strategy at Macquarie Capital.
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