China's major stock indexes ended little changed on Monday, though tech firms were sold amid ZTE woes. The blue-chip CSI300 index ended up 0.2 percent at 3,766.33 points, while the Shanghai Composite Index slipped 0.1 percent to 3,068.01 points. All eyes were on China's ZTE, which is seeking a resolution to a US ban on selling it parts and software that it has said threatens its survival.
"The ZTE ban raised worries over escalating China-US trade tensions regarding tech sectors," Chen Guo, analyst, Essence Securities, said in a note. A dozens of fund managers have already cut the valuations of ZTE shares by more than 20 percent, with some even flagging a 30 percent cut. ZTE stock is halted on the mainland and Hong Kong.
The ZTE ban came at a time when China and the United States have threatened each other with tens of billions of dollars in tariffs in recent weeks, fanning worries of a full blown trade war that threatens global supply chains as well as business investment plans. Tech stocks were under pressure amid the ZTE woes, with the tech-heavy start-up board ChinextP closing down 1.7 percent in its third session of drops.
US Treasury Secretary Steven Mnuchin said on Saturday he may travel to China, a move that could ease tensions between the world's two largest economies, as international policymakers acknowledged Beijing needs to change its trade practices.
However, investors found some solace on the geopolitical front, after North Korea said on Saturday it would immediately suspend nuclear and missile tests, scrap its nuclear test site and instead pursue economic growth and peace. Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.29 percent, while Japan's Nikkei index closed down 0.33 percent.
The largest percentage gainers in the main Shanghai Composite index were Jilin Expressway Co Ltd up 10.12 percent, followed by China United Network Communications Ltd gaining 10.06 percent and EmbedWay Technologies Shanghai Corp up by 10.01 percent. The largest percentage losses in the Shanghai index were Western Region Gold Co Ltd down 10.01 percent, followed by Shanghai Wondertek Software Co Ltd losing 10.01 percent and Jiangyin Jianghua Microelectronics Materials Co Ltd down by 10 percent.