Hong Kong Stocks Fall As Trade War Fears Return

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2018-03-14 HKT 18:00

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  • The sacking of Rex Tillerson has rattled global markets as investors fear US will now be taking a more hardline approach on trade. File photo: RTHK

    The sacking of Rex Tillerson has rattled global markets as investors fear US will now be taking a more hardline approach on trade. File photo: RTHK

Hong Kong stocks broke a four-day winning run to end lower on Wednesday on fears the White House will take a harder line on foreign affairs after Donald Trump sacked his secretary of state.

The Hang Seng Index fell 0.5 percent, to close at 31,435.

On the mainland, the Shanghai Composite Index lost 0.6 percent, to 3,291 and the Shenzhen Composite Index fell 0.9 percent, to 1,878.

News that Rex Tillerson had been sacked rattled US equities, as the former oilman had been seen as taking a more pragmatic line on various issues, particularly on global trade.

He will be replaced by CIA chief Mike Pompeo, who is an advocate of taking a hardline with China on trade and Iran.

All three main US markets had ended lower overnight and most of Asia followed suit.

Tokyo stocks snapped a four-day winning streak, as investors locked in profits. The benchmark Nikkei 225 index fell 0.9 percent, to 21,777.

Sydney lost 0.7 percent, Singapore fell 0.5 percent and Seoul was off 0.4 percent while Wellington, Manila and Taipei also fell.

Analysts viewed Tillerson as a fan of free markets and fear Pompeo may take a harsher line on trade issues.

"While the game of revolving chairs in Washington plays on, there is more risk aversion creeping into play as geopolitical uncertainty ratchets higher with the more hawkish foreign policy leaning Mike Pompeo now the face of US foreign policy," said Stephen Innes, who heads Asia-Pacific trading at Oanda.

"Equity investors remain extremely cautious about trade war escalations." (AFP)