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Monday, May 20, 2019, 17:30
HK stocks drop as worries deepen over Huawei sanctions, trade war
By Reuters
Monday, May 20, 2019, 17:30 By Reuters

HONG KONG - The Hong Kong stock market closed weaker on Monday as Beijing and Washington officials firmed up their rhetoric on trade, while technology companies posted steep losses. 

The Hang Seng index was down 0.6% at 27,787.61 points, its lowest close since February 8. The Hang Seng China Enterprises index ended 0.5% weaker.

Leading the losses, the IT sector ended 3.2% lower. The financial sector closed 0.5% lower, while the property sector ended up 0.6%. Energy shares jumped 1.5% due to higher oil prices. 

Alphabet Inc's Google has suspended business with Huawei Technologies that requires the transfer of hardware, software and technical services except those publicly available via open source licensing, a source familiar with the matter told Reuters on Sunday. 

Huawei's founder and Chief Executive Ren Zhengfei said on Saturday the growth of the Chinese mainland tech giant "may slow, but only slightly" due to the recent US restrictions. 

Cases of European firms forced to transfer technology in China are increasing despite Beijing saying the problem does not exist, a European business lobby said, adding that its outlook on the country's regulatory environment is "bleak". 

Shares of Tencent Holdings, the most actively traded in Hong Kong, shed 3.9% after the company delayed the broadcast of "Game of Thrones" finale episode, which prompted uproar among fans of the popular TV series in China. 

US President Donald Trump said in an interview aired on Sunday night that the tariffs on Chinese goods were causing companies to move production out of China to Vietnam and other countries in Asia. The comments came as China struck a sterner tone in its rhetoric, suggesting that a resumption of talks, aimed at ending the 10-month trade war between the world's two largest economies, was unlikely to happen soon. 

The top gainer on the Hang Seng was CLP Holdings Ltd , which ended 2.9% higher, while the biggest loser was WH Group Ltd, which closed 5.2% lower.

About 2.33 billion Hang Seng index shares were traded. The volume traded in the previous trading session was 1.98 billion. 

At close, mainland's A-shares were trading at a premium of 24.05% over Hong Kong-listed H-shares.

 


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