Blue chips hit 13-month low on trade war fears
Chinese mainland stocks extended a bruising sell-off on Wednesday, with blue chips slumping to their worst loss in over a year on growing concerns about economic outlook amid a bitter trade dispute with the US and a faltering yuan.
The blue-chip CSI300 index fell 2.03 percent to 3,459.26 points, the lowest level since May 2017, while the Shanghai Composite Index plumbed a fresh two-year low before closing 1.10 percent down at 2,813.18 points.
There were few signs of easing trade tensions between the US and China.
The US House of Representatives overwhelmingly passed a bill on Tuesday to tighten foreign investment rules, spurred by bipartisan concerns about Chinese bids to acquire sophisticated US technology.
US President Donald Trump on Tuesday endorsed Treasury Secretary Steven Mnuchin’s measured approach to restricting Chinese investments in US technology companies, saying a strengthened merger security review committee could protect sensitive American technologies. That raised fears of ZTE’s fate, whose shares were down 3.24 percent in Shenzhen.
Investors worried a depreciating yuan could trigger capital outflows that would in turn weigh on asset prices and could push up costs for domestic airlines with dollar-denominated debts.
An index tracking major developers on the mainland tumbled 4 percent to an 11-month low.
An index tracking major developers on the mainland market tumbled 3 percent to a ninemonth low.
Consumer shares also tumbled, with a sector index off 4.5 percent to post its worst day since March, as investors pocketed gains amid a broad sell-off in the market.