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China shares derail as U.S. move against HK dents sentiment

Credit: REUTERS/ALY SONG

China and Hong Kong shares fell on Wednesday on deepening worries about Sino-U.S. decoupling after President Trump signed a bill that would penalize banks doing business with Chinese officials who implement the new security law.

SSEC -1.4%, CSI300 -1.0%, HSI -0.6%

HK->Shanghai Connect daily quota used -1.8%, Shanghai->HK daily quota used 2.7%

FTSE China A50 -0.8%

SHANGHAI, July 15 (Reuters) - China and Hong Kong shares fell on Wednesday on deepening worries about Sino-U.S. decoupling after President Trump signed a bill that would penalize banks doing business with Chinese officials who implement the new security law.

** At the midday break, the Shanghai Composite index .SSEC was down 1.39% at 3,367.21 points, erasing earlier gains.

** China's blue-chip CSI300 index .CSI300 was down 1.04%, with its financial sector sub-index .CSI300FS dropping 1.79%, the consumer staples sector .CSI000912 up 0.55%, the real estate index .CSI000952 down 2.15% and the healthcare sub-index .CSI300HC up 2.1%.

** Chinese H-shares listed in Hong Kong .HSCE fell 0.69% to 10,333.46, while the Hang Seng Index .HSI was down 0.55% at 25,337.34, after opening higher at 1.6%.

** U.S. president Donald Trump on Tuesday ordered an end to Hong Kong's special status under U.S. law to punish China for what he called "oppressive actions" against the former British colony, and signed a bill approved by the U.S. Congress to penalize banks doing business with Chinese officials who implement the new security law.

** China said on Wednesday it will impose retaliatory sanctions on U.S. individuals and entities after Trump's move.

** The sanction threats over Hong Kong would dent short-term sentiment and cast shadow on funding flows of the city, said Zhang Qi, analyst with Haitong Securities, adding that the latest bill reinforced the idea that frictions between China and U.S. has become normalized.

** The smaller Shenzhen index .SZSC was down 1.77% and the start-up board ChiNext Composite index .CNT was weaker by 1.34%.

** Around the region, MSCI's Asia ex-Japan stock index .MIAPJ0000PUS firmed up by 0.29%, while Japan's Nikkei index .N225 advanced 1.28%.

** The yuan CNY=CFXS was quoted at 7.0024 per U.S. dollar, 0.07% firmer than the previous close of 7.0075.

(Reporting by Cheng Leng, Luoyan Liu and Andrew Galbraith, Editing by Sherry Jacob-Phillips)

((cheng.leng@thomsonreuters.com; +8610-5669-2129;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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