China and Hong Kong stocks slip as gold shares drag, lingering trade tensions in focus
- At the midday break, the Shanghai Composite index was down 0.44% at 3,899.05 points
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.”