Hong Kong Stocks Slide On China-US Tariff War

Shares in Hong Kong sank on Tuesday, in line with a sell-off across Asia and following a hammering on Wall Street as China's retaliation against US tariff hikes fanned fears of an all-out trade war between the economic titans.

The Hang Seng Index fell 1.5 percent, to 28,122.

On the mainland, the Shanghai Composite Index lost 0.7 percent, to 2,883 and the Shenzhen Composite Index fell 0.6 percent, to 1,542.

Tokyo ended down 0.6 percent, marking its seventh straight loss.

Sydney and Singapore each dropped 0.9 percent, with Manila and Jakarta both down 1.4 percent. There were also losses in Taipei and Wellington, though Seoul edged up slightly.

"Uncertainty and short-term sentiment impact is likely to stay," Medha Samant, director of investment at Fidelity International, told Bloomberg TV. "In the short term, it looks like volatility is here to stay and we could see this risk-off, risk-on going on for a long time."

After announcing the higher tariffs, the editor of Communist Party-owned Chinese newspaper Global Times warned Beijing could also hit the US by offloading Treasuries, ending US agricultural purchases and reducing orders for Boeing airplanes.

Oanda senior market analyst Jeffrey Halley warned there could be worse to come.

"Given that equity markets are so far behind the curve in repricing the risk to the new-world reality, equities could be in for an extended period of pain," he said in a note.

On currency markets the yuan – which has fallen more than 2 percent since Trump last week threatened to hike tariffs – edged up slightly against the US dollar, while the greenback was also slightly lower against the pound and euro. (AFP)