HK, Shanghai Stocks Keep Sliding On Trade War Fear

Hong Kong and Shanghai shares resumed their downward spiral on Wednesday as investors fret over the China-US trade talks, fearing the two economic giants could embark on a painful trade war.

The Hang Seng Index sank 1.2 percent, to 29,003.

On the mainland, the Shanghai Composite Index dropped 1.1 percent, to 2,893, while the Shenzhen Composite Index fell 0.7 percent, to 1,530.

A red wave swept across the region as investors grew increasingly concerned. Tokyo shed 1.5 percent by the close while Sydney and Seoul each fell 0.4 percent. Singapore dropped one percent and Manila was 1.4 percent lower.

Taipei, Bangkok, Mumbai and Jakarta also sank.

However, a first New Zealand interest rate cut since late 2016 – and a signal of further reductions – helped Wellington reverse course to end 0.4 percent higher.

Stephen Innes at SPI Asset Management warned there could be worse to come.

"With the possibility of the trade deal in tatters, markets could turn upside down," he said in a note.

"Indeed, the relentless bull market seemed impervious to risk, but [that] spawned a high degree of complacency that leaves most market participants ill-prepared for the inevitable reversal."

He added: "While the impact of more tariffs will be harmful to both the US and China economies, it is hard to overlook the damaging effect on other economies in Asia." (AFP)