Hong Kong Stock Slip On New Trade Fears

Hong Kong shares fell again in the first few minutes of Thursday on fresh concerns about the Sino-US trade talks that are slated to kick off later in the day.

The Hang Seng Index dropped 0.11 per cent to 25,626.

And the benchmark Shanghai Composite Index inched down to 2,924, while the Shenzhen Composite Index, which tracks stocks on China's second exchange, was also barely moved, dipping to 1,609.

European and US equities rallied on Wednesday after reports that China was open to a partial trade deal with the United States in key talks this week.

But the optimism receded on Thursday after a report in the South China Morning Post that China and the US had made no progress on key issues in deputy-level talks.

The report "dashed hopes for progress in US-China talks", Japan's Okasan Online Securities said in a note.

With less than a week to go before the next round of punitive tariffs is due to hit, Beijing's top trade envoy Liu He will on Thursday meet US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

Rodrigo Catril, markets strategist at National Australia Bank, warned that making a partial deal might not be something to welcome long-term.

"Market jitters along with increasing evidence that trade tensions are contributing to the slowdown in US, China and global growth, suggest that not only the US but also China could benefit from making an interim deal," Catril said.

"But making a soft trade deal carries the risk of triggering a strong political backlash ahead of the US elections next year," he said in a note. (AFP)