Stocks decline on trade tensions and profit-taking
Print Edition
SHANGHAI stocks dipped yesterday as investors took profit of companies that are to be included in the MSCI indices while worries continued over tensions in global trade.
The Shanghai Composite Index lost 0.71 percent to 3,169.57 points, ending a two-day rebound.
While news of the inclusion of 234 A-shares in the MSCI China index boosted the domestic market yesterday, “a round of profit taking however dragged down today’s market,” said Shen Meng, director of domestic investment bank Chanson & Co.
Gu Yongtao, strategic analyst at Cinda Securities, said domestic investors’ anticipation of which stocks would be included differed only slightly from the MSCI announcement.
Investors then took profit of the stocks they have long been buying, Shen said.
Kweichow Moutai Co, a liquor maker to be included in MSCI indices on June 1, lost 1.15 percent to 734.52 yuan (US$115.35) after gaining 7.13 percent over the past two weeks.
The Industrial and Commercial Bank of China, another stock to be included in the indices, gave up its gains on Tuesday and fell 1.48 percent to 6.00 yuan yesterday.
Worries of a possible trade war between China and US “also weighed on the market as huge uncertainties remain, making investors wary before the upcoming next round of trade negotiations,” Shen said.
The US and China are “still very far apart” on disputes over trade, said US Ambassador to China, Terry Branstad, yesterday.
Shanghai’s drop echoed declines in Hong Kong and Tokyo amid rising geopolitical worries triggered by news that North Korea abruptly called off talks with Seoul and threatened to withdraw from a planned summit with the US in Singapore next month.
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