China stocks fall on rising Sino-U.S. tensions, economic worries

SHANGHAI — China stocks fell on Wednesday as rising Sino-U.S. tensions and lingering worries over the coronavirus damage on the economy curbed risk appetite.

** The blue-chip CSI300 index fell 0.7% to 3,845.61, while the Shanghai Composite Index dropped 0.3% to 2,836.80 points.

** U.S. President Donald Trump said on Tuesday that he was preparing a strong response to China’s planned national security laws for Hong Kong, adding it would be announced before the end of the week.

** Investors are also closely monitoring the pace of China’s economic recovery from the coronavirus crisis. Profits at the country’s industrial firms fell at a slower pace in April, but the economy faces persistent pressure as activity and demand remain weak.

** “Risks of a second COVID-19 wave and further geopolitical tensions cannot be ruled out, but these have yet to morph into material impact at this point,” said Jingyi Pan, a Singapore-based market strategist at financial services firm IG.

** Frank Benzimra, head of Asia equity strategy at Societe Generale, said he expects more fiscal and monetary efforts by Beijing to fight unemployment, which could benefit Chinese sectors including infrastructure.

** China’s consumer staples sector fell 1.15% and the healthcare sub-index dropped 1.96%, while the real estate index rose 0.19% ** The smaller Shenzhen index ended down 0.85% and the start-up board ChiNext Composite index fell 1.964%.

** The largest percentage gainers in the main Shanghai Composite index were Sichuan Hongda Co Ltd, up 10.19%, followed by Silvery Dragon Prestressed Materials Co Ltd Tianjin , which rose 10.14% and Shangying Global Co Ltd , up 10.08%. ** The largest percentage losers in the Shanghai index were Kingfa Sci&Tech Co Ltd, down 10.01%, followed by Sinovel Wind Group Co Ltd, dropped 8.7%, and Zhejiang Jiuzhou Pharmaceutical Co Ltd, down by 7.31%. (Reporting by Shanghai Newsroom; Editing by Vinay Dwivedi)