Trade-war proxy stocks tumbled Monday, with ZTE Corp. down as much as 13 percent in Hong Kong and pork producer WH Group Ltd. falling 12 percent. Exporters including Lens Technology Co. and Luxshare Precision Industry Co. both declined by the 10 percent daily limit in Shenzhen, while airlines and port developers also dropped. Gold producers rose as investors sought haven stocks.
Oil giant PetroChina briefly climbed as much as 0.8 percent in a sudden late afternoon surge, erasing a loss of as much as 3.5 percent in Shanghai. A similar pattern was seen for China Petroleum & Chemical Corp. as with Shanghai Composite’s heavyweight Industrial & Commercial Bank of China Ltd.
Chinese state-backed funds were active in selected stocks on Monday including two large oil companies, people familiar with the matter said. Mainland authorities have a history of intervening to smooth swings in the country’s $7 trillion stock market, though their efforts have had mixed success in recent years.
The Hang Seng China Enterprises Index slid 3 percent at the close in Hong Kong, while the Shanghai Composite Index retreated 5.6 percent. The CSI 300 Index sank as much as 6.8 percent, while the ChiNext at one point plunged 8.4 percent. Foreign investors sold onshore equities, offloading net 5.6 billion yuan ($828 million) through trading links, while mainland investors sold HK$4.2 billion ($541 million), the most since February 2018.
While a spokesman for China’s Ministry of Foreign Affairs said Monday that a delegation was still preparing to travel to the U.S. for talks, he didn’t answer a question about the date or whether the group would be led by the vice premier.
Sovereign bonds climbed, with the yield on 10-year government bonds falling 5 basis points to 3.35 percent.
This article was provided by Bloomberg News.