No end in sight?
Yesterday, the Shanghai Composite gained even though the trade war seemed to be intensifying with Trump adding Huawei to the banned companies’ list. Department of Treasury data also showed that China dumped American Treasuries (TLT) in March. Even though the news on the trade war front remained largely negative, both Chinese and American indexes rose yesterday.
To make matters worse today, Chinese state-run media machinery said that the US is playing “little tricks” and indicated that the company doesn’t want to talk to the US for now. An article published on state-run Xinhua New Agency’s website also accused the US of bullying and misleading the international community about the ongoing trade deal. Thus, a trade deal looks distant right now.
How did the Shanghai Composite react?
China’s benchmark Shanghai Composite Index reacted sharply to the escalating tensions. The index dropped 2.48% today to 2,882.30. The index opened around yesterday’s close but kept tumbling throughout the day. Tech-focused Shenzhen Component Index performed worse with a 3.15% fall today.
The iShares MSCI China ETF (MCHI) continued surging with 0.40% gains on May 16. Meanwhile, the iShares China Large-Cap ETF (FXI) gained 0.51%. However, the ETF was down 1.51% in pre-market trading today at 4:41 AM EST. The technology-focused KraneShares CSI China Internet ETF (KWEB) gained 0.49% on May 16. The XTrackers Harvest CSI 300 China A-Shares ETF (ASHR) gained 1.05% on May 16 but was down 2.82% in pre-market trade at 4:43 AM EST today.