Chinese stocks did not brake in the first day of the week (May 6) after the US-China tensions surged again after the threat of raising taxe...
Chinese stocks did not brake in the first day of the week (May 6) after the US-China tensions surged again after the threat of raising taxes on US $ 200 billion of Chinese goods by US President Donald Trump.
Closing the Monday session (May 6), on the Chinese market, the Shanghai Composite Index fell 5.58% to 2,906.46 points after falling more than 6% at a time. Shenzhen Component dropped to 7.56% to 8,943.52 points, while Shenzhen Composite slipped 7.381% to 1,515.80 points. The CSI 300 Index, which tracks the largest capitalized listed stocks in mainland China, fell 5.84% to 3,684.62 points.
In Hong Kong, the Hang Seng index fell 2.9% and closed at 29,209.82 points. Shares of Hong Kong-based Chinese telecommunications equipment company ZTE plunged 8.82% because the company was caught in the middle of the US-China trade war. This stock listed in Shenzhen also fell 9.98%.
Source: CNBCMSCI index in Asia (excluding Japan) decreased by 1.76% as of 16h12 (HK / SIN time).
The overseas renminbi also weakened to 6.7790 USD 1 exchange, from 6.72 to 1 USD last week. The Chinese yuan was "hand-held" at 6,776 to 1 USD, from 6.73 to 1 USD last week.
On Sunday (May 5), US President Donald Trump said that the tariff imposed on US $ 200 billion of Chinese goods would rise to 25% next Friday (May 10), although the United States continues to praise developments in trade negotiations in recent weeks.
The tariff imposed on US $ 200 billion of Chinese goods is currently at 10%. At first, Mr. Trump threatened to raise taxes on the tariff barrier in early 2019, but delayed it after the US and China agreed to negotiate trade.
Besides, Mr. Trump threatened to impose an additional tax of 25% on 325 billion USD of Chinese goods "in a short time".
“In the past 10 months, China has paid taxes to the US including 25% tax on 50 billion USD of high-tech goods and 10% with 200 billion USD of other goods. These taxes partly contribute to the great results for our economy. The 10% tax rate will increase to 25% on May 10, ”US President Donald Trump wrote on Twitter on Sunday (May 5). "325 billion USD of Chinese goods imported into the US is still not taxable, but will be taxed at 25% quickly. Taxes paid to the United States have little impact on product costs, mainly due to China. Trade agreements with China continue but are too slow, because they want to re-negotiate. Is not!".
Meanwhile, The Wall Street Journal (WSJ) noted that China is considering canceling trade talks with the US this week, due to Mr. Trump's threats. WSJ quoted the source saying that Beijing was surprised by the recent threat of Mr. Trump.
"The US president has started the new week by showing dissatisfaction with the progress of US-China trade negotiations, while Beijing is trying to re-negotiate," Rodrigo Catril, foreign exchange trading strategist, said. High at National Australia Bank, written in the morning report. "The increase in tariffs will be a bad news for high-risk assets and will threaten growth recovery globally."
In the Australian market, the ASX 200 index plunged 0.82% to 6,283.7 points when almost all sectors were in red.
The Japanese and Korean markets were temporarily suspended on Monday (May 6) on the occasion of the holiday.
US stock futures contracts fell sharply
A strong sell-off on Wall Street will take place early next week when US President Donald Trump said on Sunday (May 5) that the US will raise taxes on imports from China, thereby raising the skeptical that both of the world's largest economies may come to an agreement to end this long-running trade war.
Currently, Dow Jones futures contract implies that the base index will drop more than 450 points. Futures on the S&P 500 and Nasdaq-100 index also implied a sharp decline on Monday (May 6).
The dollar index - a measure of the greenback's performance relative to other major currencies - fluctuated at 97,593, down from above 97.8 last week.
The JPY - which is considered a safe haven currency - rose to 110.75 to 1 USD after fluctuating at 111.6 USD 1 exchange last week.
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