HSI Slips, Shanghai Brushes Off Huawei Curbs

Hong Kong stocks ended in negative territory Tuesday, extending losses fuelled by concerns about the Huawei row and its impact on the China-US trade talks.

The Hang Seng Index slipped 0.5 percent, to 27,657.

But across the border, the Shanghai Composite Index jumped 1.2 percent, to 2,905 while the Shenzhen Composite Index added 1.8 percent, to 1,548.

Some observers put Shanghai's rise to Huawei boss Ren Zhengfei's claim that the firm could absorb the impact of the US ban.

"The global telecom supply chain can still work perfectly without the US suppliers," said Sun Jianbo, president of China Vision Capital Management in Beijing.

"China and US are unlikely to allow the worst-case scenario, which involves putting up trade barriers on all fronts, as it will mean great losses for both parties. So the worst possible case may have been priced" into markets.

The developing crisis had a mixed impact on Asia's tech firms, with Samsung Electronics, a rival to Huawei in the smartphone market, rallying 2.7 percent.

But in Tokyo, Sony shed more than four percent and Sharp was off 2.5 percent, while Taiwanese chip giant TSMC shed 1.7 percent.

Most other Asian stock markets rose, but analysts cautioned that the China-US trade row could rumble on for some time.

Sydney rose 0.4 percent, Seoul added 0.3 percent and Taipei was 0.7 percent higher, with Manila, Mumbai, Bangkok and Jakarta all in positive territory.

But Tokyo ended down 0.1 percent and Wellington closed off 0.2 percent.

"The market was a little optimistic that a trade deal would just get done here this month," Brett Ewing, chief market strategist at First Franklin Financial Services, told Bloomberg News.

Dealers have "definitely come to terms with a longer term trade negotiation process". (AFP)