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China: New tariffs drive shares lower; property firms drop on pre-sale system review

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[SHANGHAI] China's stock markets fell on Tuesday, their first trading day after new US and Chinese tariffs on each others goods kicked in on Monday, while property firms plunged on worries that a property pre-sale system may be scrapped.

At the close, the Shanghai Composite index was down 16.35 points or 0.6 per cent at 2,797.48. Stock markets in China were closed on Monday for a holiday.

The blue-chip CSI300 index ended 0.9 per cent lower, with its financial sector sub-index falling 1.44 per cent. The consumer staples sector fell 0.95 per cent while the healthcare sub-index rose 0.11 per cent.

Shares of Chinese property developers plunged, with the real estate sub-index losing 4.4 per cent after six provinces were told to decide whether to retain or scrap a property pre-sale system that enables developers to secure funds before project completion. Property shares had fallen sharply in Hong Kong on Monday on the prospect of the system being scrapped.

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The United States and China imposed fresh tariffs on each other's goods on Monday as the world's biggest economies showed no signs of backing down from an increasingly bitter trade dispute that is expected to hit global economic growth.  A senior Chinese official said on Tuesday that it is difficult to proceed with trade talks with the United States while Washington is putting "a knife to China's neck", a day after both sides heaped fresh tariffs on each other's goods.

Chinese airlines slumped on worries over higher oil prices amid reluctance by the Organization of the Petroleum Exporting Countries to raise output to offset Iran sanctions. The index tracking major transport firms ended 1.2 per cent lower.

The smaller Shenzhen index ended down 0.54 per cent and the start-up board ChiNext Composite index was weaker by 0.38 per cent.

The largest percentage gainers in the main Shanghai Composite index were Guanghui Logistics Co Ltd, up 10.1 per cent, followed by Ningbo Heli Mould Technology Co Ltd, up 10.03 per cent and China Grand Automotive Services Co Ltd, up 10.02 per cent.

The largest percentage losers in the Shanghai index were HNA Technology Co Ltd, down 10.04 per cent, followed by HNA Technology Co Ltd, down 10.02 per cent and A-Zenith Home Furnishings Co Ltd, down 10.01 per cent.

HNA Technology shares hit their lowest level since July 20, 2017 after the company said it scrapped a plan to buy Beijing-based Dangdang and a related e-commerce firm.

So far this year, the Shanghai stock index is down 15.9 per cent and the CSI300 has fallen 16.2 per cent. Shanghai stocks have risen 2.05 per cent this month.

REUTERS

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