Shanghai stocks plumb 20-month low

Shanghai stocks plumbed a 20-month low on Friday as investors worried rising trade tensions with the United States could add pressure to the country's economic growth. The blue-chip CSI300 index fell 0.5 percent to 3,753.43, the Shanghai Composite Index hit its lowest since September 2016 before ending down 0.7 percent at 3,021.90.
Both indexes were down for the third session in a row. For the week, SSEC was down by 1.5 percent, while CSI300 slipped 0.7 percent. Nearly 80 stocks tumbled the maximum allowed 10 pct on Friday, led by tech firms, in particular small-cap companies. China's tech-heavy start-up board ChinextP dropped 1.9 percent to a four-month low.
"There is a long-term correction in the valuations for those small-cap firms, as they are still overvalued without solid results," said Zhu Junchun, an analyst with Lianxun Securities. Eyes were on the development of China-US trade spat. The United States has nearly completed a second list of tariffs on $100 billion in Chinese goods, as President Donald Trump prepares to enact an initial round of duties that are expected to trigger an in-kind response from Beijing, several sources said.
While it is not clear when Trump will activate the measures, rising Sino-US trade tensions will put additional pressure on China's economy, which is starting to show signs of cooling under the weight of a multi-year crackdown on riskier lending. China said on Friday it would respond quickly to protect itself if the United States hurts its interests, as US President Trump gets ready to unveil revisions to his initial tariff list targeting $50 billion of Chinese goods. ** "Amid the continued weakness in the A-share market and external uncertainties, there are strong expectations that Beijing could roll out more supportive policies than just holding fire on rates, including reserve requirement ratio (RRR) cut and fiscal policies to bolster the real economy," Zhu said. Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.35 percent while Japan's Nikkei index closed up 0.5 percent.
The largest percentage gainers in the main Shanghai Composite index were Fuda Alloy Materials Co Ltd up 10 percent, followed by Chongqing Wanli New Energy Co Ltd gaining 9.98 percent and Shanxi Coal International Energy Group Co Ltd up by 9.95 percent. The largest percentage losses in the Shanghai index were Shanghai Chuangli Group Co Ltd down 10.06 percent, followed by Guangdong Dcenti Auto-Parts Stock Ltd Co losing 10.05 percent and Weifang Yaxing Chemical Co Ltd down by 10.05 percent. So far this year, the Shanghai stock index is down 8.6 percent, the CSI300 has fallen 6.9 percent while China's H-share index listed in Hong Kong is up 1.6 percent. Shanghai stocks have declined 2.34 percent this month.