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May 6, 2019, 8:41 a.m. EDT

China stocks drop 5.5%, leading Asia markets lower as U.S.-China trade deal appears in jeopardy

Stocks in Hong Kong fall more than 3%

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By Marketwatch and The Wall Street Journal


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Stocks fell in Shanghai on Monday.

China stocks suffered their worst one-session loss in more than two years, as Asian stock markets plunged Monday on fears trade negotiations between the U.S. and China were on the verge of collapse.

On Sunday, President Donald Trump tweeted that he would raise tariffs on $200 billion of Chinese goods from 10% to 25% this week, apparently taking Chinese officials by surprise. In response, China may withdraw from the next round of trade talks scheduled to begin Wednesday in Washington. U.S. officials had indicated progress had been made at talks last week in Beijing, and said it was possible a deal could be reached by the end of this week.

But the sudden hard line by Trump spooked investors. U.S. stock market futures sank, with Dow Jones Industrial Average futures  , S&P 500 futures   and Nasdaq Composite futures   all falling around 2% by Sunday and into Monday.

Just ahead of Shanghai’s open, China’s central bank made a move to stimulate the economy by cutting reserve requirement ratios (RRRs) for 1,000 rural commercial banks, which will make it easier for small and micro companies to borrow.

The worst losses in Asia were seen in China, with the Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP -0.12%  closing down about 5.6%, which marked its worst one-day loss since a 6.4% slump in February 2016. The smaller-cap Shenzhen Composite /zigman2/quotes/210598015/delayed CN:399106 -0.23%   plunged 7.4%, also the worst one-day percentage fall since February 2016. Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -0.32%   fell 2.8%.

Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO +1.51%  closed down 0.8%, Taiwan’s benchmark fell nearly 1.8% and Singapore’s /zigman2/quotes/210597985/delayed SG:STI +0.88% key index dropped 3.2%. Japan’s Nikkei and South Korea’s Kospi were closed for holidays.

The decline in Shanghai, which came after an extended market holiday last week, was led by port and shipping companies like Ningbo Zhoushan Port Co. /zigman2/quotes/206550113/delayed CN:601018 -2.81%  and China Merchants Energy Shipping Co. /zigman2/quotes/209502831/delayed CN:601872 +0.17%  , which both fell by close to the maximum 10% daily limit.

In Hong Kong, Geely Automotive /zigman2/quotes/200716015/delayed HK:175 -0.78%  , food processor WH Group /zigman2/quotes/204247792/delayed HK:288 -0.94%   and Apple supplier AAC Technologies /zigman2/quotes/201441510/delayed HK:2018 -1.19%   were among the biggest decliners. CSPC Pharmaceutical /zigman2/quotes/200847219/delayed HK:1093 -2.88%   and China Life Insurance /zigman2/quotes/202359856/delayed HK:2628 -0.58%   also sank. Apple manufacturer Foxconn /zigman2/quotes/204111604/delayed TW:2354 +0.20%   and Taiwan Semiconductor /zigman2/quotes/207385621/delayed TW:2330 +0.24%   dropped in Taiwan. In Australia, Beach Energy /zigman2/quotes/200513631/delayed AU:BPT +3.79%   and Westpac Banking /zigman2/quotes/203084975/delayed AU:WBC +7.39%   fell.

“Arguably, Trump’s threat to lift tariffs ‘shortly’ if Beijing does not play ball on U.S. trade demands, may be more a negotiations tactics than an imminent trade action,” Mizuho Bank said in a commentary. “Nonetheless, Trump’s tweet allusions to tariffs being ‘partially responsible for ... great (U.S.) economic results’ does raise the threat of misguided trade policy” from the U.S, it said.

After posting a second straight losing week Friday, crude oil prices continued to fall Monday. U.S.-based West Texas Intermediate crude for June delivery   was down nearly 2% and global benchmark July Brent crude   fell by almost as much.

/zigman2/quotes/210598127/delayed
CN : China: Shanghai
3,219.42
-3.76 -0.12%
Volume: 16.48B
Sept. 25, 2020 3:01p
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/zigman2/quotes/210598015/delayed
CN : Shenhzen Stock Exchange
2,143.05
-5.03 -0.23%
Volume: 27.28B
Sept. 25, 2020 3:00p
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/zigman2/quotes/210598030/delayed
HK : Hong Kong Exchange
23,235.42
-75.65 -0.32%
Volume: 1.79M
Sept. 25, 2020 4:08p
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/zigman2/quotes/210598100/delayed
AU : S&P ASX
5,964.90
+89.00 +1.51%
Volume: 673,482
Sept. 25, 2020 5:03p
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/zigman2/quotes/210597985/delayed
SG : Singapore: SGX
2,472.28
+21.46 +0.88%
Volume: 0.00
Sept. 25, 2020 5:20p
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/zigman2/quotes/206550113/delayed
CN : China: Shanghai
¥ 3.80
-0.11 -2.81%
Volume: 10.82M
Sept. 25, 2020 3:00p
P/E Ratio
16.76
Dividend Yield
2.61%
Market Cap
¥60.07 billion
Rev. per Employee
¥1.41M
loading...
/zigman2/quotes/209502831/delayed
CN : China: Shanghai
¥ 5.82
+0.01 +0.17%
Volume: 17.29M
Sept. 25, 2020 3:00p
P/E Ratio
9.43
Dividend Yield
1.72%
Market Cap
¥39.23 billion
Rev. per Employee
¥2.45M
loading...
/zigman2/quotes/200716015/delayed
HK : Hong Kong
HK$ 15.18
-0.12 -0.78%
Volume: 48.83M
Sept. 25, 2020 4:08p
P/E Ratio
19.54
Dividend Yield
1.65%
Market Cap
HK$148.96 billion
Rev. per Employee
HK$3.04M
loading...
/zigman2/quotes/204247792/delayed
HK : Hong Kong
HK$ 6.31
-0.06 -0.94%
Volume: 21.98M
Sept. 25, 2020 4:08p
P/E Ratio
9.86
Dividend Yield
4.99%
Market Cap
HK$93.00 billion
Rev. per Employee
HK$1.61M
loading...
/zigman2/quotes/201441510/delayed
HK : Hong Kong
HK$ 41.55
-0.50 -1.19%
Volume: 5.03M
Sept. 25, 2020 4:08p
P/E Ratio
25.48
Dividend Yield
0.24%
Market Cap
HK$50.21 billion
Rev. per Employee
HK$411,637
loading...
/zigman2/quotes/200847219/delayed
HK : Hong Kong
HK$ 14.86
-0.44 -2.88%
Volume: 21.74M
Sept. 25, 2020 4:08p
P/E Ratio
24.15
Dividend Yield
0.00%
Market Cap
HK$111.06 billion
Rev. per Employee
HK$1.88M
loading...
/zigman2/quotes/202359856/delayed
HK : Hong Kong
HK$ 17.10
-0.10 -0.58%
Volume: 33.55M
Sept. 25, 2020 4:08p
P/E Ratio
8.52
Dividend Yield
4.68%
Market Cap
HK$1201.67 billion
Rev. per Employee
HK$7.60M
loading...
/zigman2/quotes/204111604/delayed
TW : Taiwan
NT$ 50.40
+0.10 +0.20%
Volume: 2.18M
Sept. 25, 2020 1:30p
P/E Ratio
11.14
Dividend Yield
4.96%
Market Cap
NT$71.29 billion
Rev. per Employee
NT$888.52M
loading...
/zigman2/quotes/207385621/delayed
TW : Taiwan
NT$ 424.00
+1.00 +0.24%
Volume: 38.78M
Sept. 25, 2020 1:30p
P/E Ratio
24.17
Dividend Yield
2.36%
Market Cap
NT$10994.48 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/200513631/delayed
AU : Australia: Sydney
$ 1.37
+0.05 +3.79%
Volume: 10.37M
Sept. 25, 2020 4:10p
P/E Ratio
6.25
Dividend Yield
1.46%
Market Cap
$3.12 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/203084975/delayed
AU : Australia: Sydney
$ 17.58
+1.21 +7.39%
Volume: 20.97M
Sept. 25, 2020 4:10p
P/E Ratio
13.21
Dividend Yield
4.55%
Market Cap
$63.39 billion
Rev. per Employee
$1.09M
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