China, Hong Kong stocks weaken as auto shares, Apple suppliers weigh
HONG KONG: China and Hong Kong stocks retreated on Monday, with automobile and Apple suppliers leading the decline.
At the midday break, the Shanghai Composite index was down 0.3% at 3,338.42 points. China's blue-chip CSI300 index was down 0.7%.
In Hong Kong, the benchmark Hang Seng Index was down 1% at 23,366.06. The Chinese H-share index listed in Hong Kong, the Hang Seng China Enterprises Index fell 1.3% to 8,474.69.
Apple supplier stocks lost ground after US President Donald Trump threatened tariffs on imported iPhones.
iPhone assembler Luxshare and mobile screen maker Lens Tech both lost 1.3%. Airpod maker Goertek declined 0.7%.
Car-makers also slipped, weighing on both onshore and offshore markets. The CSI All Share Automobiles Index lost 2.8% to near a one-week low, while the Hang Seng Automobile Index in Hong Kong tumbled 4.6%.
'Sentiment has been weakening without significant fresh inflow and specific themes to trade on, analysts at China Securities said in a note.
However, China's yuan has strengthened past the 7.17 level after the central bank tightened the midpoint fixing, and analysts say the strengthening trend of the currency should lend support to the nation's stocks.
'We estimate every 1% of RMB increase versus the USD could boost Chinese equities by 3%,' Goldman Sachs' China equity strategist Kinger Lau wrote in a note.
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