Hong Kong Stocks Drop, Pound Loses Ground

Hong Kong shares finished on Wednesday morning with losses on fresh concerns about the China-US trade row while plunging oil prices hit energy firms.

The Hang Seng Index dipped 0.3 percent, to 28,531 by the break.

On the mainland, the Shanghai Composite Index dropped 0.5 percent, to 2,936, but the Shenzhen Composite Index gained 0.5 percent, to 1,579.

Tapas Strickland, senior analyst at National Australia Bank, said there were "no signs that tensions will abate anytime soon".

"China's commerce minister, who is part of the trade negotiations, implied China is preparing for a protracted trade spat and is in no hurry to reach a deal at the expense of losing face," he said in a note.

Uncertainty about the Federal Reserve's plans for cutting interest rates also weighed on Asian markets while fears of a hard Brexit kept the pound wallowing at more than two-year lows.

Tokyo were all well down in the morning, while there were also losses in Singapore and Taipei with Seoul off more than 1 percent as South Korea's trade stand-off with Japan drags on.

Sydney and Manila were slightly higher.

The pound was taking another hiding with the possibility of a no-deal Brexit growing ever more likely as the two contenders to become prime minister slug it out by trying to take increasingly tough lines with the EU. Sterling is now at its lowest level since April 2017, trading at HK$9.70.

The US dollar also climbed against most higher-yielding, riskier currencies, jumping 0.8 percent against the Mexican peso, 0.3 percent on the Australian dollar and 0.2 percent versus South Korea's won. (AFP)

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