November 20, 2018 / 4:35 AM / 5 months ago

China, HK stocks drop sharply as Wall Street slump hits Asian markets

* SSEC -1.6 pct, CSI300 -1.9 pct, HSI -1.8 pct

* Financial, tech stocks lead decline in China, HK

* PICC, Xiaomi buck the trend

SHANGHAI, Nov 20 (Reuters) - China and Hong Kong stocks fell on Tuesday, led by technology and financial shares, as sharp overnight losses on Wall Street knocked down Asian markets amid slowing growth concerns.

** The CSI300 index fell 1.8 percent to 3,236.38 points at the end of the morning session, while the Shanghai Composite Index lost 1.5 percent to 2,662.28 points.

** In Hong Kong, the Hang Seng index dropped 1.8 percent to 25,890.35 points, while the Hong Kong China Enterprises Index lost 1.6 percent to 10,458.31.

** “Earnings momentum has cooled this year along with the economy and we expect the trend to extend into 2019,” Gao Ting, head of China strategy at UBS Securities, wrote in the 2019 China equity market outlook. But he pointed out that abundant pessimism sets the stage for market upside: “The double impact of tight credit conditions and China-U.S. trade tensions are likely to make growth a challenge in early 2019, but the effect of the former should fade as policy support strengthens.”

** Although a meeting between Chinese President Xi Jinping and his U.S. counterpart Donald Trump later this month at the G-20 summit in Buenos Aires, Argentina triggers hope for a trade deal between the two countries, many investors remain sceptical.

** Wu Kan, head of equity trading at Shanshan Finance, said he wouldn’t build heavy stock positions as the outcome of the Xi-Trump meeting is far from certain. ** Financial and technology sectors were among the biggest casualties in China, both dropping over 2 percent. In Hong Kong, financial stocks fell 1.6 percent while IT shares slumped 2.6 percent.

** Meanwhile, Chinese investors dumped stocks in acquisitive sectors such as entertainment, media and computer for the second day in a row, on concerns new regulatory demands and a slowing economy could force heavy write-downs for firms that overpaid for assets during the boom years.

** Bucking the trend, People’s Insurance Group of China Co Ltd , which debuted in Shanghai on Friday, jumped the maximum 10 percent. And Chinese smartphone maker Xiaomi Inc jumped over 4 percent in Hong Kong, after saying it swung to a net profit in the third quarter, beating analysts’ estimates.

Reporting by Samuel Shen and John Ruwitch, Editing by Sherry Jacob-Phillips

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