Investors are worried about US-China trade war after Washington said on Wednesday that it may jack up the tariff rate on the next $200 billion in Chinese imports it plans to target as it pressures Beijing to reform its trade practices. US Trade Representative Robert Lighthizer said President Donald Trump asked him to consider increasing the proposed tariffs to 25% from the planned 10%.
The new tariff threat on Chinese goods comes just days after Beijing retaliated against the administration's imposition of 25% tariffs on $34 billion in goods. The Trump administration is considering an additional $16 billion in goods, but that review is ongoing, an official said Wednesday.
Among index heavyweights, Tencent (00700) dipped 3.3% to HK$341.4, HKEX (00388) shed 2.4% to HK$223.8. China Mobile (00941) fell 1.4% to HK$68.9. AIA (01299) sank 1.9% to HK$66.
Shares of Mainland lenders fell across the board, dragged by weakening A-share market. CCB (00939) declined 2.4% to HK$6.9. ICBC (01398) retreated 2.4% to HK$5.65. ABC (01288) was down 2.4% to HK$3.72.
BOC (03988) fell 2.2% to HK$3.6. CM Bank (03968) weakened by 3% to HK$29.6.
Chinese insurers were also lower. PICC Property & Casualty (02328) edged down 0.5% to HK$8.94. Ping An (02318) pounded 3% to HK$70.15. China Life (02628) dipped 2.9% to HK$18.96.
NEWS FROM THE PRESS: China to take more tax-cuts & policy measures -- China's Politburo meeting chaired by President Xi Jinping concluded on 31 July. The Politburo also pledged to take targeted policy measures to ensure economic stability. The Politburo meeting also pledged to continue with deleveraging, but mainly through addressing zombie SOEs and fine-tuning financial regulations, rather than tightening overall liquidity conditions and pushing up interest rates.
ECONOMIC NEWS: Hong Kong's value of total retail sales in June, provisionally estimated at $37.8 billion, rose 12% over the same month in 2017, according to the Census and Statistics Department. The revised estimate of the value of total retail sales in May 2018 grew 12.9% over a year earlier. For the first half of 2018, it was provisionally estimated that the value of total retail sales increased by 13.4% over the same period in 2017. After netting out the effect of price changes over the same period, the provisional estimate of the volume of total retail sales in June was up by 9.8% over a year earlier. The revised estimate of the volume of total retail sales in May grew 11.5% over a year earlier. For the first half of 2018, the provisional estimate of the total retail sales increased by 11.8% in volume over the same period in 2017.
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