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Asia, News

China, Hong Kong stocks retreat after Trump issues bans on WeChat, TikTok

* SSEC -1.5%, CSI300 -1.7%, HSI -2.3%

* HK->Shanghai Connect daily quota used -4.7%, Shanghai->HK daily quota used -2.4%

* FTSE China A50 -1.4%

SHANGHAI, Aug 7 (Reuters) – China and Hong Kong stocks fell sharply on Friday after the Trump administration unveiled a plan to ban U.S. transactions with ByteDance’s TikTok and Tencent-owned WeChat, escalating tensions with Beijing.

** The CSI300 index fell 1.7% to 4,682.02 points at the end of the morning session, while the Shanghai Composite Index lost 1.5% to 3,337.43 points.

** The Hang Seng index dropped 2.3% to 24,364.43 points, while the Hong Kong China Enterprises Index lost 2.1% to 9,989.69 points.

** U.S. President Donald Trump announced on Thursday sweeping bans on U.S. transactions with China’s ByteDance, the owner of video-sharing app TikTok, and Tencent, the operator of WeChat, starting in 45 days.

** Adding to pressure, Trump administration officials have also urged the president to delist Chinese companies that trade on U.S. exchanges and fail to meet U.S. auditing requirements by January 2022.

** Investors have turned cautious as major Chinese indexes are facing pressure at current levels after pulling back from multi-year highs hit in early July, said Jin Jing, an analyst at Caitong Securities.

** Liquidity conditions have also tightened marginally, while external headwinds, including Sino-U.S. tensions, dampened sentiment, prompting some investors to exit the market, he added.

** Tech stocks fell across the board on Friday. By the midday break, Shenzhen’s tech-heavy start-up board ChiNext fell 2.6%, the newly launched STAR 50 index shed 3.5%, while the Hang Seng tech index slumped 4.7%.

** Chinese tech giant Tencent’s shares tumbled as much as 10.1% on Friday morning following the U.S. ban.

** China’s exports rose at the fastest pace in seven months in July, while imports declined, painting a mixed picture for the economy as it recovers from its pandemic-induced slump.

** “The data is in line with our forecast for exports to recover more decisively in H2 alongside the global economy,” said Louis Kuijs, head of Asia economics research at Oxford Economics. (Reporting by Luoyan Liu and Andrew Galbraith, Editing by Aditya Soni)

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