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HONG KONG/SHANGHAI: China’s yuan weakened and stock markets on the mainland and Hong Kong fell on Wednesday, as investors leaned toward the return of Donald Trump as president even as preliminary counting in the US election still showed a tight presidential race.

US stock futures jumped and the dollar rose across the board, as some tallies pointed to Trump making gains over Vice President Kamala Harris in battleground states.

China’s blue-chip CSI300 Index fell 0.27% after opening a tad higher, while Hong Kong’s benchmark Hang Seng was down 2.5%. Hong Kong-listed China tech stocks declined broadly in early trade, dragging down the Hang Seng. E-commerce giant JD.com slumped more than 5% while Meituan and Alibaba were down nearly 4%, respectively.

The US presidential election will have a meaningful impact on China’s economy and capital markets. As part of his pitch to boost American manufacturing, Trump has promised voters he will impose tariffs of 60% or more on goods from China.

China’s equity market is in the midst of recovering from a years-long slump as authorities promise to address weak consumption and a downturn in the real estate sector.

The CSI 300 index is up more than 20% since Sept. 23, when Beijing started rolling out rate cuts and stimulus. But a Trump win could stymie that rally, with technology, defence and export sectors in the crosshairs of his policies. Since both Democrats and Republicans are relatively united in antagonism to China, markets may not react dramatically until there are concrete policy changes announced.

“Although both candidates are probably hawkish toward China, Trump is still less predictable in terms of policy, so the prospect of a Trump win could still drag sentiment a bit,” said Kenny Ng, strategist at China Everbright Securities International in Hong Kong. Onshore markets were, however, holding out for more stimulus proposals and details from the Standing Committee of China’s National People’s Congress (NPC), which meets through Nov. 4-8.

“Onshore investors are more focused on the NPC meeting this week and are waiting to see if there will be more forceful stimulus coming through, which will have a bigger impact on the markets compared to the election,” Ng said.

The offshore yuan fell more than 0.8% versus the dollar, its weakest since mid-August. Its onshore counterpart was also down more than 0.55%, and China’s major state-owned banks were selling dollars to prevent the yuan from weakening too fast, sources told Reuters. Trump’s proposed tariff and tax policies are viewed as inflationary and therefore likely to keep US interest rates high and undermine currencies of trading partners.

During Trump’s first presidency, the yuan weakened about 5% against the dollar during the initial round of US tariffs on Chinese goods in 2018, and fell another 1.5% a year later when trade tensions escalated.

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