HSI Dives 2 Percent As China, US Duel Over Trade

Hong Kong stocks led the Asian retreat on Wednesday as China announced plans to hit the United States with new tariffs in response to Washington's own target list.

The Hang Seng Index fell 2.2 percent, to end at 29,518.

On the mainland, the Shanghai Composite Index fell slightly 0.2 percent, to 3,131 and the Shenzhen Composite Index dipped 0.6 percent, to 1,831.

Fears of a trade war between the world's top two economies weighed on other Asian markets also, with several major markets closing in the red despite a recovery on Wall Street.

Markets in Japan and Australia clung on to marginal gains but South Korea dipped into the red, delivering a mixed picture across the region.

Tokyo opened strongly but stocks sank throughout the trading day, finishing only 0.1 percent up at 21,319.

The Japanese market was helped by a weaker yen which helps exporters, said Hikaru Sato, senior technical analyst at Daiwa Securities.

The dollar was trading at 106.56 yen against 106.60 yen in New York on Tuesday, rising from levels below 106 seen a day earlier. (AFP)