April 4, 2018 / 8:42 AM / a year ago

HK stocks tumble in late trading as Beijing hits back against U.S. tariffs

April 4 (Reuters) - Hong Kong stocks tumbled over 2 percent on Wednesday, with most of the damage done in afternoon trading as Beijing’s swift retaliation against U.S. tariffs renewed fears of a full-blown trade war between the world’s two biggest economies.

The Hang Seng index skidded 2.2 percent to 29,518.69, while the China Enterprises Index lost 2.3 percent to 11,857.41 points.

The market was relatively calm in the morning session, as investors largely looked past the widely-expected announcement by the Trump administration to slap 25 percent tariffs on $50 billion of annual imports from China.

But the mood quickly turned dark in the afternoon, as investors took fright after Beijing announced it would impose additional tariffs of 25 percent on 106 U.S. products including soybeans, autos and chemicals. U.S. stock futures and Treasury yields also fell on the news.

“Such swift countermeasures from Beijing disillusioned investors who had hoped for a solution at the negotiating table,” said Linus Yip, Hong Kong-based strategist at First Shanghai Securities Ltd.

“Some investors also chose to reduce risk exposure ahead of the holiday break at this sensitive juncture.”

The Hong Kong market will be closed on Thursday for the Tomb-sweeping festival, or Qingming, exposing investors to volatility in global markets. (Reporting by the Shanghai Newsroom Editing by Shri Navaratnam)

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