Moscow, may 20 — “News. Economy.” The escalation of the trade conflict between Washington and Beijing have caused a sharp sell-off in Chinese markets last week, writes Reuters.
The yuan has dropped 2.5% this month. The weakening currency and uncertainty in terms of trade strengthened, the outflow of foreign capital from the stock market. As of may 17, foreign investors through the Stock Connect is the beginning of the month sold shares in mainland China amounting to about 36 billion yuan, breaking a five-month series of purchases.
Shares of the four largest banks in the country fell on fears that they will be asked to increase lending to support the economy.
Shares of information technology and telecommunications companies, which largely depend on global supply chains have undergone a serious correction. As of Friday, the CSI IT fell by 21.3% with more than one-year high hit April 2. The index that tracks the largest telecommunication company of China, fell 22.6% from a 16-month high hit on April 22.
Stock suppliers, Huawei dropped sharply after the United States took against Chinese Telecom giant tough measures.
As reported “Vesti. Economy”, the US President Donald trump on Wednesday signed a decree giving the government authority to block transactions related to information and communication technologies that “pose an unacceptable risk to the national security of the United States.” After this, the Ministry of Commerce decided to make Huawei and its related legal entities in the black list.
The company is heavily dependent on foreign markets, in particular, electronics manufacturers, faced with falling prices for their shares.
Shares of Chinese goods provider Hangzhou Hikvision CCTV that in 2018 received 30% of its revenue from overseas operations fell by about 25% with a 10-month high hit April 2.
Shares of Apple supplier Luxshare Precision Industry also decreased by 25% from a record high, as tensions in the trade threatens to disrupt the supply chain.
The best dynamics demonstrated shares of companies in the agricultural sector of China. Investors expect that these firms will benefit from the reciprocal duties of China on agricultural products of the United States.
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