Hong Kong Stocks Tumble Over 3% On Trade Spat

Hong Kong stock market shed over 900 points in the afternoon trade as investors fret over a possible trade war between the US and China after Donald Trump threatened fresh sanctions, sparking warnings of retaliatory measures by Beijing.

An hour into the second session, the Hang Seng Index sank 3 percent, to 29,424.

On the mainland, the Shanghai Composite Index plunged 3 percent, to 2,932, while the Shenzhen Composite Index tanked 4.4 percent, to 1,618.

Asian investors were already on edge after the world's top two economies on Friday announced tit-for-tat measures on goods valued at about US$50 billion as the US president pushes ahead with his protectionist America First agenda.

Trump said he had asked the US Trade Representative to identify $200 billion worth of imports to be targeted, adding he would hit a further $200 billion if Beijing retaliates. China slammed the threats as "blackmail" and warned that if the US followed through with the threats, it would hit back equally hard.

Tokyo was 1.1 percent lower while Seoul sank 0.7 percent, Taipei fell 1.3 percent and Manila lost 1.7 percent. However, Sydney and Singapore each rose 0.2 percent.

"Will it escalate from here? We'd certainly hope not, but it's certainly a risk," said Craig Vardy, head of fixed income in Australia for BlackRock.

"The numbers we think at the moment are pretty small. These are just warning shots going across the bows as some of these countries try and correct some of the trading numbers." (AFP)

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