China tech stocks plunge as trade war fears rattle markets - TechCentral

China tech stocks plunge as trade war fears rattle markets

Chinese technology and telecommunications stocks were the hardest hit on Monday as two tweets from US President Donald Trump soured the outlook on trade talks and sent global markets plunging.

A gauge of IT stocks dropped 5.8%, the most since July 2015, leading the MSCI China Index lower. Telecoms equipment maker ZTE tumbled as much as 13% before paring the decline to 8.8% in Hong Kong, while Apple supplier GoerTek slumped by the 10% daily limit in Shenzhen.

China’s foreign ministry said that officials were still planning to travel to the US for the next round of talks but was unable to confirm when, amid signs that a delay is now being considered. The response came after Trump said in tweets that progress on trade talks was too slow and threatened to slap steeper tariffs on Chinese goods.

“If the trade talks don’t go well, China’s 5G-related companies will definitely be affected,” said Amy Lin, a Shanghai-based analyst with Capital Securities, referring to names linked to next-generation telecoms networks. “The sector is also under correction pressure after their strong gains.”

MSCI China’s tech stocks gauge surged 34% this year through to last week, the second best performer, helped by earlier optimism over trade talks. The sector has become a trade war proxy as giants from ZTE to Huawei Technologies found themselves at the centre of an escalating technology rivalry between China and the US. The MSCI sub-gauge tumbled as much as 7% on Monday, while the ChiNext gauge of tech firms and small caps fell 7.9% in Shenzhen, its biggest loss since January 2016.  — (c) 2019 Bloomberg LP

Comments are closed.

© 2009 – 2021 NewsCentral Media