Hong Kong and China stocks ended lower, as a slump in shares of ZTE (0763) and resurfacing China-US trade tensions sent shivers through the market, ahead of a US Fed meeting yesterday, which was expected to raise interest rates by a quarter percentage point to 1.75 percent to 2 percent.
The Hang Seng Index lost 377 points, to 30,725 points. Hang Seng China Enterprises Index fell 170 points to 12,035. Market turnover reduced to HK$84.43 billion. The blue-chip CSI300 index ended 1 percent lower at 3,788 points, while the Shanghai Composite Index closed down 1 percent at 3,049 points.
Investors wiped about US$3 billion off embattled Chinese telecommunications giant ZTE's market value as it resumed trade yesterday after agreeing to pay up to US$1.4 billion in penalties to the US government. During its trading halt, fund managers cut their valuations of ZTE shares, with some lowering valuations of its A-shares to 20.04 yuan per share, or a 36 percent discount to the closing level on April 16.
Adding to worries, the trade frictions between the United States and China are also back on the radar ahead of tomorrow, by when Washington said it will release a list of US$50 billion worth of Chinese goods that will be subject to a 25 percent tariff.
Nearly all blue-chips declined. Tencent Holdings (0700) slid 0.53 percent, AIA (1299) dropped 0.91 percent, HSBC (0005) lost 0.13 percent, AAC Technologies Holdings (2018) slumped 4.1 percent.
Mainland financial stocks dropped broadly. ABC (1288) down 1.69 percent, ICBC (1398) decreased 1.68 percent, CCB (0939) lost 1.24 percent, Bank of China (3988) dropped 1.43 percent.
In contrast , semi-conductors thrived. SMIC (0981) soared 4.64 percent, Hua Hong Semi (1347) jumped 10.45 percent, Skyworth Digital (0751) added 6.53 percent.