HONG KONG: Chinese stocks edged down on Monday in volatile trading as China and the US prepared to slap more punitive trade tariffs on each other, while investors awaited the upcoming annual parliamentary sessions to gauge Beijing’s policy path.
Onshore stocks gave up gains in the morning session to close lower, with the Shanghai Composite Index declining 0.1% and the blue-chip CSI300 Index closing flat. Both indexes lost around 2% each on Friday.
Hong Kong’s benchmark Hang Seng Index added 0.3% after swinging between gains and losses to recover from Friday’s biggest decline in four months. The Hang Seng Tech Index lost 0.6%.
Renewed concerns over escalating trade tensions kept investors on edge after President Donald Trump last week announced an additional 10% tariff on all Chinese imports starting March 4, on top of the 10% tariff imposed since February 4.
In response to these new US import tariffs set to take effect on Tuesday, China is preparing countermeasures, China’s state-backed Global Times reported, with American agricultural exports likely to be targeted.
Meanwhile, investors were also watching potential support measures to boost domestic demand at China’s annual National People’s Congress meeting this week.
Chinese investors tend to have low expectations of the parliamentary meetings, with some expressing concerns about the risk of insufficient policy stimulus, Goldman Sachs said in a note, citing recent meetings with clients.
Beijing was expected to maintain its economic growth target at roughly 5% and announce a budget deficit of 4% of GDP.
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