Hong Kong Stocks Slump At Close

Hong Kong shares ended sharply down on Friday, after US President Donald Trump's decision to impose new tariffs on China sent global markets plummeting.

The Hang Seng Index dropped 2.4 percent, or 647 points, to 26,918.

The benchmark Shanghai Composite Index tumbled 1.4 percent, or 40 points, to close at 2,867. The Shenzhen Composite Index, which tracks stocks on the mainland's second exchange, ended 1.5 percent, or 23 points lower, at 1,539.

Markets across the region also fell sharply on the news out of the US, ratcheting up investor fears over the trade war between the world's top two economies.

The losses in Asia followed a broad-based sell-off on Wall Street, where the Dow finished 1.1 percent lower on Thursday, losing more than 400 points following Trump's announcement that Washington would impose 10 percent in tariffs on another US$300 billion in Chinese goods.

The decision came just as US markets were rallying on the back of the Federal Reserve's decision Wednesday to cut interest rates for the first time in more than a decade.

"The 10 percent is... for a short-term period and then I can always do much more or I can do less, depending on what happens with respect to a deal," Trump said at the White House, adding, "it could be lifted up to well beyond 25 percent."

The announcement means virtually all of the US$660 million in annual trade of goods between the world's two biggest economies will have tariffs on them, with the new duties set to take effect September 1.

The US decision came after trade negotiators held talks in Shanghai this week, the first face-to-face discussions since Trump and President Xi Jinping agreed to a truce in June.

Negotiators are now set to reconvene in Washington in early September for another round of talks.

Trump told reporters he was "not concerned... at all" by the negative reaction among investors, saying he had anticipated it.

Tokyo declined 2.1 percent, Taipei shed one percent while Seoul dropped 1.7 percent. (AFP)