HSI Sheds Nearly 700 Points Ahead Of US Talks

Hong Kong stocks tumbled more than 2 percent on Thursday, extending a sell-off fuelled by fears over the China-US trade stand-off, with investors looking ahead to the resumption of talks later in the day.

The Hang Seng Index sank 2.4 percent, or 692 points, to 28,311.

On the mainland, the story was similar. The Shanghai Composite Index lost 1.5 percent, to 2,850 while the Shenzhen Composite Index fell 1.3 percent, to 1,510.

The major markets in Asia continued the retreat. Tokyo sank 0.9 percent, Seoul plunged more than three percent, while Singapore, Taipei, Jakarta, Mumbai and Manila were also sharply lower.

But Sydney and Wellington each chalked up 0.4 percent gains.

After several rounds of negotiations, the two-day meeting in Washington, which kicks off later in the day, has taken on huge significance after the two sides threatened of more punitive tariffs.

Commenting on the visit to Washington of China's top negotiator, Neil Wilson, chief market analyst at Markets.com, said: "So is Liu He really coming to do a deal? I think probably it's (a) case of gaining a reprieve in order to avert the rise in tariffs.

"It looks like we are yet a wee bit away from a comprehensive trade deal. But the Vice Premier's visit and the prospect of tariffs being hiked is all a bit of an unknown right now and the market positioning is defensive as a result."

But some analysts remained cautious. Oanada senior market analyst Jeffrey Halley said that markets "could move sharply, either way, depending on the news flows, with equities and oil the most vulnerable to the outcome of the trade talks". (AFP)