HK Stocks Lose Ground On Trade War Fears

Asian markets were mixed on Monday as investors were gripped by concerns about the China-US trade war after American President Donald Trump said he was prepared to walk away from next month's planned talks.

Trump's comments spooked US investors and added to the sense of pessimism across world trading floors after the White House last week announced fresh tariffs on China and labelled it a currency manipulator.

Beijing responded by halting all purchases of US agricultural goods.

Trump said on Friday it would be "fine" if the negotiations were called off, telling reporters: "We're not ready to make a deal but we'll see what happens."

He added: "We have all the cards. We're doing well."

Market negativity provided support to safe haven gold, which was sitting at a six-year high around US$1,500.

Here in Hong Kong, the Hang Seng Index dropped in late trade, closing the day down 114 points at 25,824.

Shares of Cathay Pacific plunged 5 percent to their lowest level in 10 years after Beijing banned the entry into the mainland of any Cathay employee who has taken part in anti-extradition protests.

Its parent, Swire Pacific, saw its shares drop 6 percent to their level level in one-and-a half years.

HSBC slipped 1.6 percent following the resignation of its Greater China Chief Executive Helen Wong and the stepping down of its CEO John Flint. The bank's chief risk office Mark McKeown is also said to have resigned.

Across the border, sentiment was lifted after the mainland securities watchdog relaxed rules on speculative trading.

The Shanghai Composite Index dropped 1.5 percent. The blue-chip CSI300 index fell 1.8 percent and the market in Shenzhen plunged 1.9 percent.

Across the region, Seoul put on 0.2 percent and Sydney added 0.1 percent. But Taipei, Wellington and Jakarta were slightly lower.

Tokyo, Mumbai, Bangkok, Manila, Kuala Lumpur and Singapore were closed for public holidays.

The downbeat mood in financial markets was being slightly offset by central banks' shift to softer monetary policy, though there are growing concerns about the outlook for the global economy.

There was also some solace in remarks from key China hawk and top Trump adviser Peter Navarro, who said he still expected the Sino-US talks to go ahead.

However, he raised concerns about Beijing's weak yuan and warned officials needed to move on key issues including subsidies to state firms, forced technology transfer and cyber intrusion.

"Equities remain sensitive to trade headlines even as some of the initial shock announcement of a new offensive to be launched on September 1 has worn off," said OANDA senior market analyst Alfonso Esparza.

"But with no clear olive branch being offered by either side the trade dispute has no end in sight, putting downward pressure on equities." (additional reporting by AFP)