April 11, 2019 / 4:39 AM / 2 months ago

China, Hong Kong stocks skid amid trade, growth concerns

* SSEC -1.4 pct, CSI300 -2.0 pct, HSI -0.9 pct

* China producer inflation picks up for first time in 9 months

* U.S. proposes list of EU goods for tariff retaliation against Airbus subsidies

SHANGHAI, April 11 (Reuters) - China and Hong Kong stocks retreated on Thursday, as escalating U.S.-European trade tensions added to worries over global economic outlook.

** The CSI300 index fell 2 percent to 4,004.91 at the end of the morning session, while the Shanghai Composite Index lost 1.4 percent to 3,197.89.

** The Hang Seng index dropped 0.9 percent to 29,841.01, while the Hong Kong China Enterprises Index lost 1.1 percent to 11,629.90.

** In a fresh escalation of trade tensions, U.S. President Donald Trump has threatened new tariffs on goods from the European Union even as the Sino-U.S. trade dispute remains unresolved.

** ECB President Mario Draghi raised the prospect of more support for the struggling euro zone economy on Wednesday if its slowdown persisted, saying the central bank had “plenty of instruments” with which to react.

** That came after IMF’s warning that the global economy was slowing more than expected and a sharp downturn could require world leaders to coordinate stimulus.

** China’s factory-gate inflation picked up for the first time in nine months in March, edging away from deflationary territory, in a fresh sign that government efforts to boost the economy may be starting to revitalise domestic demand.

** But analysts urge caution, saying it will take a few more months of better data and further policy support from Beijing to see if a recovery can be sustained.

** On the mainland, sectors sank across the board, led by consumer firms which had saw robust gains this year.

** The CSI300 consumer staples index slumped 3.6 percent, still having gained more than 50 percent this year.

** For the medium to long term, the A-share market will remain rangebound, and significant corrections could not be ruled out if in particular policy support fails to meet expectations or in case of unfavourable changes in external environments, Shanxi Securities wrote in a report.

** The market calls for the support of fundamentals, while the bottom of corporate earnings is yet to be determined as the economy is still in a downward trend, the brokerage added.

** Around the region, MSCI’s Asia ex-Japan stock index lost 0.51 percent while Japan’s Nikkei index was unchanged.

** The yuan was quoted at 6.7151 per U.S. dollar, 0.01 percent firmer than the previous close of 6.7158.

** The largest percentage gainers in the main Shanghai Composite index were DongFeng Automobile Co Ltd, up 10.07 percent, followed by Dongfang Electric Corp Ltd , gaining 10.04 percent and Sichuan Golden Summit Group Joint Stock Co Ltd, up by 10.04 percent.

** The largest percentage losers in the Shanghai index were Lily Group Co Ltd, down 9.99 percent, followed by Zhejiang Shengda Bio-Pharm Co Ltd, losing 9.31 percent and Shandong Shida Shenghua Chemical Group Co Ltd , down by 8.78 percent.

** So far this year, the Shanghai stock index is up 29.99 percent, while China’s H-share index is up 16.2 percent. Shanghai stocks have risen 4.89 percent this month.

** The top gainers among H-shares were Dongfeng Motor Group Co Ltd, up 1.04 percent, followed by Tencent Holdings Ltd, gaining 0.77 percent.

** The three biggest H-shares percentage decliners were Haitong Securities Co Ltd, which has fallen 3.77 percent, Air China Ltd, which has lost 3.6 percent and China Vanke Co Ltd, down by 3.3 percent.

** About 21.99 billion shares have traded so far on the Shanghai exchange, roughly 52.5 percent of the market’s 30-day moving average of 41.93 billion shares. The volume traded was 38.01 billion as of the last full trading day.

** As of 04:17 GMT, China’s A-shares were trading at a premium of 25.23 percent over the Hong Kong-listed H-shares.

Reporting by Luoyan Liu and John Ruwitch; Editing by Shreejay Sinha

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