BUSINESS Stocks slump to 6-week low on US memorandum

BUSINESS

Stocks slump to 6-week low on US memorandum

Global Times

20:45, March 25, 2018

Fears of a trade war between the world's two largest economies jolted China's markets on Friday, with the country's main stock indexes tumbling the most in six weeks.

The Shanghai Composite Index closed down 3.39 percent at 3,152.76 points, its lowest close since February 9, while the blue-chip CSI300 index was down 2.87 percent at 3,904.94 points, its lowest close since February 12.

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(Photo: VCG)

More than 400 stocks plunged by 10 percent, the daily maximum, during Friday's selloff, led by tech and materials firms targeted by, or seen as being most affected by, US tariffs.

The tech-heavy start-up board ChiNext index closed down 5.02 percent, while an index tracking major material firms dropped 4.00 percent.

Bucking the broader trend, a slew of local agriculture firms surged, including agricultural product processors as well as seed and pork producers, as they are expected to benefit from China's potential retaliatory measures against the US.

China shares fell sharply after US President Donald Trump signed a presidential memorandum on Thursday that could impose tariffs on up to $60 billion worth of imports from China, although the measures have a 30-day consultation period. On Friday, China unveiled plans for tariffs on up to $3 billion worth of US imports in response to US tariffs on Chinese steel and aluminum.

China urged the US to "pull back from the brink," while its embassy in Washington vowed the Chinese government would "fight to the end" in any trade war with the US.

For the short-term, analysts expect sour sentiment for China's A-share markets, as domestic investors have not fully "digested the impact of an imminent trade war" and tend to dump shares and adopt a wait-and-see risk-aversion attitude.  

Some 4.21 billion locked shares will become eligible for trading between March 26 and March 30, according to Wind Info.

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