Hong Kong stocks eye worst week since global financial crisis, China falls milder on state support

HONG KONG: Hong Kong stocks lost ground on Friday and were on track for their biggest weekly decline since the 2008 global financial crisis, battered as China takes the brunt of US President Donald Trump’s escalating trade war.

In mainland China, however, the stock market has been supported by purchases from state firms and the declines were much milder.

Thursday’s relief rally as Trump hit the pause button on most of his so-called “reciprocal” tariffs was short-lived and traders are now assessing the impact of duties levied thus far. The pause did not include China which has had eye-popping duties of 145% levied on its goods this year.

The Hang Seng Index fell 0.8% in early Friday trade, hovering near a three-month low and bringing its losses this week to 9.7%.

The tech subindex weakened 0.5%. Beijing has stepped up efforts to stabilise mainland markets this week, with a state fund and state holding companies stepping into the market to buy stocks.

A slew of listed firms have also announced share buybacks.

The Shanghai Composite Index was down just 0.1% on Friday morning, though the blue-chip CSI 300 Index dropped 0.6%. Both are on track to lose 3.8% this week, their worst weekly decline in four months.

Liam Zhou, founder of Shanghai-based Minority Asset Management, said his $1 billion portfolio is now fully invested in China stocks and that he was wagering on the country’s economic resilience.

China, Hong Kong stocks rise with regional markets, Beijing support

“China’s retaliation against US tariffs drew strength from the fact that China has reduced economic reliance on the US, it has proactively tamed property sector risks, made technology breakthroughs and is upgrading the manufacturing sector,” he said.

Elsewhere, Wall Street saw a sharp decline overnight. MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.3%, while Japan’s Nikkei tumbled 4.2%.