- The Shanghai Composite and Hang Seng indexes fell sharply today, with the Hang Seng falling more.
- This year, Hong Kong-listed stocks have underperformed mainland stocks amid protests in Hong Kong.
The Shanghai Composite fell 1.8% today and closed at 2,909.9. Additionally, it fell 0.5% on Friday, despite October trade data showing that exports and imports fell less than feared. However, fading expectations of a US-China trade deal more than offset the trade data on Friday, and have continued to impact stocks today. Donald Trump’s comments on rolling back China tariffs have spooked investors. Reuters reports Trump tweeted, “China would like to get somewhat of a rollback, not a complete rollback, ‘cause they know I won’t do it,” Trump said. “I haven’t agreed to anything.”
US-China trade optimism has lifted markets this month, and the Dow Jones Industrial Average has risen 2.3%. However, the Shanghai Composite has fallen 0.68%, and the Hang Seng has been almost flat. Meanwhile, economic indicators point to the Chinese economy bottoming out. For more analysis, read Why China’s Slowdown Indicators Are Confusing.
US-China trade deal: What’s really happening
Whereas trade deal news has been moving markets this year, recent reports suggest the two sides still aren’t on the same page. One stumbling block has been tariffs. While China wants the existing tariffs to be waived, the US hasn’t budged. Furthermore, a trade deal may not solve all of China’s problems. Read US-China Trade War: There’s No Miracle Deal to learn more.
Hang Seng and Shanghai Composite
This year, the Hang Seng has risen only 4.2%, while the Shanghai Composite has gained 16.7%. And today, the Hang Seng fell 2.6%, while the Shanghai Composite fell 1.8%. There have been reports of police firing at protestors in Hong Kong, leaving one in critical condition. The news, coupled with Trump’s tariff comments, sent the Hang Seng down by 2.6%. The fall wiped out the index’s November gains.