Markets

Shanghai stocks end weaker as slowdown worries dent sentiment

SHANGHAI: Shanghai stocks ended the first session of the month on a bearish note on concerns that escalating trade tensions could increase risks of a global slowdown, and as investors were worried Beijing's stimulus measures might impact liquidity.

The blue-chip CSI 300 index ended up 0.1 per cent at 3,632.01 on Monday, while the Shanghai Composite Index closed 0.3 per cent weaker at 2,890.08 points.

In May, China and Hong Kong stocks both logged their worst monthly declines since last October as Sino-U.S. trade tensions accelerated. Last month also saw the heaviest foreign outflows via the Stock Connect linking mainland and Hong Kong, with foreign net equities sales reaching more than 50 billion yuan ($7.24 billion).

Monday's drop came after China's chief securities regulator' comments that the Sino-U.S. trade war is affecting capital markets but the impact is controllable.

China threatened on Friday to unveil an unprecedented hit-list of "unreliable" foreign firms, groups and individuals that harm the interests of Chinese companies.

China will investigate whether FedEx Corp damaged the legal rights and interests of its clients, the official Xinhua news agency said on Saturday, after Chinese telecoms giant Huawei said parcels intended for it were diverted.

The United States cannot use pressure to force a trade deal on China, a senior Chinese official and trade negotiator said on Sunday, refusing to be drawn on whether the leaders of the two countries would meet at the G20 summit to bash out an agreement.

Going into June, there are still internal and external factors that could weigh on the A-share market's performance, even as the market's valuations have returned to historically low levels, investment bank China International Capital Corporation Limited (CICC) noted in report.

The negative impact from trade disputes and protectionist measures on the global growth could demonstrate more evidently, while Beijing's measures to prevent financial risks and deleverage small and medium banks could also impact market liquidity and the financial support for the real Read More – Source
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