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SHANGHAI: China's leading stock indexes plunged by more than 5% on Monday (May 6th) after US President Donald Trump threatened to raise tariffs on Chinese imports, risking derailment of high-level trade talks at the time. that they were entering their final phase.
Shanghai's benchmark composite index closed the morning session down 5.19%, or 159.69 points, to 2,918.65, while the Shenzhen Composite Index, which follows shares of China's second largest stock exchange, fell 5.86%, or 95.88 points, to 1,540.71.
In Hong Kong, the Hang Seng index plunged 3.43%, or 1,031.00 points, to 29,050.55.
The losses were a sell-off in Asia after Trump's tweet threatened to raise tariffs on $ 200 billion worth of Chinese goods by the end of the week.
This warning was apparently aimed at speeding up negotiations between the economic superpowers.
But this blocks the upcoming talks scheduled for Washington this week, with Bloomberg News and the Wall Street Journal reporting that the Chinese side is now considering delaying these talks in response to Trump's threat.
The Chinese yuan also suffered Friday morning, falling by about 1% to 6,8023 yuan to the dollar, after losing 1.3% at one point, its largest decline in three years.
Friday's fall exacerbates the recent contraction of Chinese equities, which had so far enjoyed a good year thanks to a series of incentives put in place by the government to protect the Chinese economy from trade turbulence and other winds otherwise.
After a miserable year 2018 during which Chinese indexes were hit by the trade war, the Shanghai index rose about 30% between the beginning of the year and mid-April .
But signs that China would limit additional stimulus measures have contributed to a fall of about 10% over the last three weeks.
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