HONG KONG: China and Hong Kong stocks edged lower on Monday as anxiety over US trade policy intensified ahead of the July 9 tariff deadline, with upcoming inflation data expected to further test investor nerves.
At market close, China’s blue-chip CSI300 Index slipped 0.4%, while the Shanghai Composite Index barely changed.
In Hong Kong, the benchmark Hang Seng was down 0.1%.
Although China is not at risk of imminent higher tariffs, thanks to the trade truce with the US, sentiment was still largely subdued as US President Donald Trump’s policy swings left investors on edge.
Trump warned on Sunday that the US will impose an additional 10% tariff on any countries aligning themselves with what he called the “Anti-American policies” of the BRICS group of developing nations.
He also said that the US is now close to finalizing several trade agreements and will notify other countries of higher tariff rates by July 9, with the higher rates set to take effect on August 1.
“Markets are set to see more volatility from here” and are unlikely to see a sustained uptrend with the expiring tariff deadline and trade policy uncertainties impacting risk appetite, analysts at Huatai Securities said in a note.
Leading the onshore markets’ losses on Monday, the AI sector declined 1.1%, the energy sector slid 1.8% while the liquor distillers index weakened 0.8%.
The medical services sector weakened 0.7% after China’s finance ministry said on Sunday it was restricting government purchases of medical devices from the European Union in retaliation for Brussels’ own curbs last month.
Helping offset the losses, Chinese property developers listed in mainland and Hong Kong, climbed by 1.4% and 0.9%, respectively, after the housing regulator vowed to put a floor on dropping home prices.
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