China stocks clock biggest monthly fall since Oct as trade war escalates

  • Business
  • Friday, 31 May 2019

SHANGHAI: China stocks fell on Friday, posting the worst monthly decline since last October, as festering trade tensions between Beijing and Washington reduced risk appetite and stoked economic slowdown fears.

At the close of trade, the blue-chip CSI300 index fell 0.3%, to 3,629.79, while the Shanghai Composite Index lost 0.2% to 2,898.70 points.

For the month, CSI300 and SSEC fell 7.2% and 5.8%, respectively, recording their biggest monthly decline since October.

Trade tensions between Beijing and Washington rapidly worsened this month, after U.S. President Donald Trump accused China of reneging on earlier promises in trade talks, and slapped fresh tariffs on $200 billion of Chinese goods, triggering retaliation from China. 

China’s President Xi Jinping and U.S. President Donald Trump are likely to find it “difficult” to make major progress toward ending their countries’ trade war when they meet at a G20 summit in Japan in June, Dai Xianglong, a former Chinese central bank chief said on Friday. 

Adding to investor concerns, an official survey released on Friday showed that China’s factory activity in May slumped into a deeper contraction than markets had expected, heaping pressure on Beijing to roll out more stimulus to support an economy hit hard by a bruising trade war with the United States.

China’s rare earth-related firms were again in the spot light on Friday, with media reports raising speculations that the material might be used as a weapon in the trade front. 

China is willing to meet reasonable demand for rare earths from other countries, but it would be unacceptable that countries using Chinese rare earths to manufacture products would turn around and suppress China, its commerce ministry said. 

Rare earth-related shares, including Shenghe Resources Holding Co Ltd, Beijing Zhong Ke San Huan High-Tech Co Ltd and Jl Mag Rare-Earth Co Ltd soared, helping lift an index tracking the metal sector by 0.6 percent.

The Shenzhen index ended unchanged for the day and the start-up board ChiNext Composite index was weaker by 0.1%. 

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.18%, while Japan’s Nikkei index closed down 1.63%. 

At 0723 GMT, the yuan was quoted at 6.9037 per U.S. dollar, 0.03% weaker than the previous close of 6.9013. - Reuters
Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 7
Cxense type: free
User access status: 3

CSI300 , Shanghai Composite


Across The Star Online

Air Pollutant Index

Highest API Readings

    Select State and Location to view the latest API reading

    Source: Department of Environment, Malaysia