March 22, 2018 / 7:29 AM / a year ago

China stocks fall on Fed rate hike, trade war concerns

* Shanghai stocks lower, blue-chip CSI300 index down

* Gains in Shanghai stocks led by Jiangsu Highhope International Group Corp and losses by China CSSC Holdings Ltd

* China’s A-shares are at 26.66 percent premium over H-shares

SHANGHAI, March 22 (Reuters) - China stocks fell on Thursday, led by consumer and real estate firms, as investors digested the impact of a rate hike by the U.S. Federal Reserve and as concerns over a potential trade war between the world’s largest and second-largest economies intensified. ** At the close, the Shanghai Composite index was down 0.5 percent at 3,263.48, while the blue-chip CSI300 index was down 1 percent at 4,020.35. ** U.S. President Donald Trump will announce tariffs on Chinese imports on Thursday, a White House official said, in a move aimed at curbing theft of U.S. technology and likely to trigger retaliation from Beijing and stoke fears of a global trade war. ** In response, China said it will actively take steps to safeguard its interests as well as those of its industries. ** “China will not sit idly by while legitimate rights and interests are hurt. We must take all necessary measures to firmly defend our rights and interests,” the Commerce Ministry said in a fresh statement on Thursday. ** The measures planned by Washington so far are expected to have a limited impact on China’s economy, which is far less dependent on exports than it was a decade ago. ** “Most Chinese corporates seem to be quite resilient against a potential trade war given the high share of domestic revenue,” said Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis. “However, there are certain sectors which will be relatively more affected, such as information technology and consumer durables.” ** An index tracking major consumer goods makers dropped 3 percent, while an index tracking IT firm lost 0.8 percent. ** Market participants also pondered the impact of the Fed’s rate hike on Wednesday. ** China gingerly raised a key short-term interest rate on Thursday following the Fed’s move overnight, in a symbolic reminder that Beijing is keeping an eye on global market trends even as it cracks down on financial risks at home. ** The real estate sector, sensitive to rate hikes, fell 1.9 percent. ** “Today’s hike confirms that China’s hiking cycle will continue after the new PBoC Governor Yi Gang takes charge,” Betty Wang, senior China economist with ANZ Research, wrote in a note. ** “With intensive deleveraging efforts ongoing and a potential uptrend in CPI inflation, we expect China’s current monetary policy to continue its tightening bias under Yi’s leadership,” Wang added. ** The largest percentage gainers in the main Shanghai Composite index were Jiangsu Highhope International Group Corp up 10.09 percent, followed by Tian Jin Global Magnetic Card Co Ltd gaining 10.07 percent and Lucky Film Co Ltd up by 10.04 percent. ** The largest percentage losses in the Shanghai index were China CSSC Holdings Ltd down 10 percent, followed by Antong Holdings Co Ltd losing 9.98 percent and CSSC Offshore & Marine Engineering Group Co Ltd down by 9.58 percent. ** As of 07:11 GMT, China’s A-shares were trading at a premium of 26.66 percent over the Hong Kong-listed H-shares. (Reporting by Shanghai Newsroom; Editing by Subhranshu Sahu)

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