Fears of a trade war between the world’s two largest economies on Friday jolted China’s markets, with the country’s main stock indices tumbling the most in six weeks, while Japanese shares were the biggest losers in the region.
Chinese shares fell sharply after Beijing unveiled plans for tariffs on up to US$3 billion of US imports in retaliation for US duties on steel and aluminum products from China and other countries that went into effect on Friday.
The MSCI Asia-Pacific index on Friday fell 2.6 percent to 171.97, down 3.5 percent from last week’s 178.13.
US President Donald Trump also on Thursday signed a memorandum that could impose tariffs on up to US$60 billion of imports from China, although the measures have a 30-day consultation period.
China urged the US to “pull back from the brink,” while its embassy in Washington vowed Beijing would “fight to the end” in any trade war.
The Shanghai Composite index on Friday closed down 3.6 percent at 3,152.76 points, its lowest close since Feb. 9 and also down 3.6 percent for the week.
China’s blue-chip CSI300 index on Friday fell 2.9 percent to 3,891.47, its lowest close since Feb. 12 and down 4 percent for the week.
In Hong Kong, the Hang Seng Index closed 2.5 percent lower at 30,309.2, its lowest since March 7 and down about 4 percent for the week.
All three indices suffered their biggest daily percentage drops since Feb. 9. It was also their worst weekly performance in six weeks.
The weighted index on the Taiwan Stock Exchange on Friday closed down 182.51 points, or 1.66 percent, at 10,823.33. That brought the TAIEX’s weekly loss to 1.9 percent.
Tariffs proposed by Trump could reduce China’s GDP growth by 0.1 percent this year, UBS Securities head of China Strategy Gao Ting said.
In a separate note on Friday, the UBS chief investment office said it saw a 20 to 30 percent probability of “damaging retaliation” by China to US trade actions.
More than 400 Chinese stocks on Friday plunged by the maximum allowed 10 percent, led by tech and materials firms targeted or seen as being most affected by the US tariffs.
The tech-heavy start-up board index ChiNextP closed down 5 percent, while an index tracking major material firms dropped 4 percent.
Bucking the broader trend, a slew of local agriculture firms surged, including agricultural products processors, seed and pork producers, as they are seen benefiting from China’s potential retaliatory measures against the US.
For the short term, analysts expect soured sentiment for equity markets, though many saw a limited effect.
“Strategically, we remain optimistic about Chinese assets, as the rising trade tensions better highlight the importance of [China’s] stress on more quality rather than quantity of its economic growth,” Shenwan Hongyuan securities wrote in a note.
In Hong Kong, sectors fell across the board, dragged down by IT and industrial firms.
An IT sub-index tumbled 4.3 percent, as the bellwether Tencent Holdings Ltd (騰訊) extended losses. Tencent fell more than 4 percent after Naspers Ltd revealed a plan to cut its stake in the Chinese Internet giant.
Japanese shares suffered the worst of the losses in Asia trading on Friday, exacerbated by the strong yen, with the Nikkei 225 Stock Average slumping 4.5 percent to close at an October last year low while the TOPIX retreated 3.6 percent to the lowest since September.
For the week, the Nikkei 225 lost 5 percent, while the TOPIX fell 4 percent.
South Korea’s KOSPI shed 3.2 this week and Australia’s S&P/ASX 200 fell 2.2 percent.
Additional reporting by staff writer, with CNA
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
RSS