Hong Kong Stocks End Shortened Trading Day Lower

Hong Kong shares finished lower on Wednesday as China-US tensions offset hopes that US lawmakers could resume stalled stimulus talks.

The Hang Seng Index eased 0.7 percent, or 188 points, to 25,178, with trading cancelled in the morning owing to a typhoon in the city.

The benchmark Shanghai Composite Index dropped 1.2 percent, or 42 points, to 3,408, while the Shenzhen Composite Index on China's second exchange fell 1.9 percent, or 44 points, to 2,253.

Tokyo ended up 0.2 percent and Sydney added 0.7 percent while Mumbai, Seoul and Taipei were also higher. But Singapore dropped 0.1 percent and Manila sank more than one percent, while Wellington, Taipei and Jakarta saw sizeable losses.

Souring US-China relations remain on traders' radars, with the latest salvo out of Washington coming from a warning to colleges and universities to sell any Chinese holdings in their endowments owing to proposed fresh rules that could see the firms de-listed.

The announcement comes with the superpowers locked in several standoffs ranging from Hong Kong, trade and the coronavirus, and US accusations of digital espionage.

There is also some trepidation about a trade pact signed between the two in January, which observers say is the crucial issue, with any sign that could be in peril expected to spark another sharp markets drop.

But while talks on the deal were called off last weekend, there is a general feeling that both sides want to keep it in place.

"The US-China standoff is different to the trade spat era, where Trump was a lot more vocal, and it seemed as if he wanted to be seen to be verbally attacking China," said David Madden at CMC Markets.

"Seeing as he has an election to fight in a few months, he is taking a different approach. No doubt he will use the Chinese government as a bogeyman... but given the state of the US economy, he is unlikely to do anything too aggressive for fear the Beijing administration might launch a tough economic attack." (AFP)