September 12, 2018 / 9:34 AM / 3 months ago

Chinese stock markets battered by trade war fears

(Reuters) - Chinese stocks have lost more than a fifth of their value in dollar terms this year on concerns that rising U.S. tariffs on Chinese imports would hurt corporate earnings.

The world’s two biggest economies have applied tariffs to $50 billion of each other’s goods.

As U.S. President Donald Trump threatens to impose further tariffs on all the roughly $500 billion (£384.35 billion) of Chinese imports, which could spell further downside for mainland shares, here’s a rundown of how much damage has been inflicted so far.

China exports consumer goods such as cell phones, computers and televisions, and industrial goods including electric power equipment and machinery to the United States.

The Shanghai Composite index .SSEC has declined around 20 percent this year and is already the worst performer among the major stock indexes in the world, ranking alongside crisis-hit emerging markets such as Turkey, Venezuela and Argentina. China's other blue-chip index .CSI300 is also down about 20 percent.

(Graphic: Price performance of major stock indexes since March 22 - reut.rs/2oXmPY1)

Rising trade tensions have slowed down share transaction volumes in Chinese bourses in recent months. The average daily turnover of Chinese stocks in the Shanghai SE Composite index fell to a four-year low in August.

(Graphic: China turnover and index value - reut.rs/2Ng75NF)

Fund managers are shifting their equity holdings into safer money market instruments. Recent data from the Asset Management Association of China showed Chinese money market funds attracted nearly 1 trillion yuan in July.

(Graphic: Money flows into China's mutual funds - reut.rs/2NUtWeR)

(Graphic: Fund managers cutting exposure in companies with higher U.S. revenue - reut.rs/2oZoFry)

Companies with higher revenue exposure to the United States have seen sharper declines since March and fund managers have been trimming their holdings on those shares. Li & Fung (0494.HK), AAC Tech (2018.HK) and WH Group (0288.HK) are among the companies with higher exposure to the United States and have seen sharp declines in their share prices this year.

(Graphic: Chinese companies with U.S. exposure - reut.rs/2oznf6S)

Consumer discretionary, industrials and tech companies are facing the biggest cut in the consensus earnings forecasts and target price forecasts for this year and next year.

(Graphic: China sector-wise estimate change - reut.rs/2oXqsND)

(Graphic: China sector performance - reut.rs/2oXZntV)

Reporting By Patturaja Murugaboopathy; Additional reporting by Samuel Shen in SHANGHAI; Editing by Vidya Ranganathan and Alex Richardson

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