Chinese Stocks Slide Near Two-Year Low as Trump Warns of More Tariffs
Liao Shumin
DATE:  Jun 19 2018
/ SOURCE:  Yicai
Chinese Stocks Slide Near Two-Year Low as Trump Warns of More Tariffs Chinese Stocks Slide Near Two-Year Low as Trump Warns of More Tariffs

(Yicai Global) June 19 -- China's three bourse indexes tumbled today, with Shanghai dropping to its lowest level in nearly two years, amid concerns about an escalating trade spat between the world's two largest economies after US President Donald Trump threatened additional tariffs on Chinese imports.

The Shanghai Composite Index fell 3.78 percent to 2,907.82 points, the lowest since June 2016. It was the first time in almost two years that the benchmark dropped below 3,000 points. 

The Shenzhen Component Index ended 5.31 percent down at 9,414.76 points, its lowest since March 2016. Shenzhen's Growth Enterprise Market index fell 5.76 percent to 1,547.15, which was the most bearish reading since January 2015.

Hong Kong's Hang Seng index dropped 2.78 percent to close at 29,468.15.

The stocks of some 1,500 companies slumped more than 9 percent on the two mainland markets, which were closed yesterday for the national Dragon Boat Festival.

Fears over a ratcheting up of tit-for-tat trade measures are unnerving investors. Trump further heightened tensions yesterday by threatening an extra 10 percent import tax on a list of USD200 billion worth of Chinese goods. That's on top of a 25 percent tariff on USD50 billion of Chinese imports announced on June 15.

China's commerce ministry responded by saying that if the US loses its rationality and publishes another list of Chinese products for extra duties, Beijing will need to take comprehensive measures to hit back, state-run Xinhua News Agency reported.

"Such practice of imposing extreme pressure and blackmailing is contrary to the consensus the two sides have reached through rounds of consultations, and disappoints the international community," a ministry spokesperson said yesterday.

Trade worries also played out in the foreign exchange market with the yuan weakening nearly 600 basis points to 6.4754 against the US dollar from 6.4168 the previous trading day.

Editor: Emmi Laine

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Keywords:   Stock,China's Yuan,TARIFFS,Trade Spat,USD,CNY,Forex,Shanghai Composite Index,Shenzhen Component Index