10 May

Chinese and Hong Kong Markets Surge Even as Tariffs Take Effect

WRITTEN BY Mayur Sontakke, CFA, FRM

Rise of the fallen

This week was brutal for Chinese and Hong Kong markets until May 9. It all started with President Donald Trump’s tweets on May 5 announcing tariffs on $200 billion worth of Chinese goods. The tariffs came into effect today even as both sides continued to ponder a deal.

Today is the second and final day of the talks between the United States and China to reach a deal. Experts believe that a deal may not be reached today, but President Trump has asserted that a deal is still possible.

Chinese and Hong Kong Markets Surge Even as Tariffs Take Effect

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Despite the tariffs and uncertainty surrounding the trade talks, the Chinese and Hong Kong markets have recovered from their multiweek lows.

Shanghai Composite’s gains

After falling for three out of four days this week, the Shanghai Composite Index rose over 3% on May 10 to end the week at 2,939.21. It looked like it was going to end the day in the red, but it recovered after lunch.

Your ETFs

The iShares MCHI China ETF (MCHI) fell 1.66% on May 9, slightly underperforming the Shanghai Composite Index. However, the ETF was up 0.94% in premarket trading on May 10 at 4:08 AM EDT.

The more diversified Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR) fell 0.82% on May 9. However, the ETF was up 2.27% in premarket trading at 5:05 AM EDT.

The iShares China Large-Cap ETF (FXI) followed MCHI’s path to end the day with a 1.67% fall on May 9.

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