The benchmark in Hong Kong Hang Seng Index (HSI) was the worst performer in Asia, closing at 1.3%, after recovering slightly from a shift of more than 3% before the day. From China Shanghai Composite (SHCOMP) the index fell 0.9%. The rest of the region also fought: that of South Korea Kospi (KOSPI) and that of Japan Nikkei (N225) lost 1% and 0.6%, respectively.
“Investors’ nerves were shaken ”by the sanctions,“ darkening geopolitical waters, ”said Jeffrey Halley, a senior analyst at the Asia Pacific market in Oanda.
Washington on Monday announced sanctions against two Chinese officials for “serious human rights abuses” against Uyghur Muslims and other ethnic minorities in Xinjiang. The European Union, Canada and the United Kingdom imposed sanctions on the same individuals and others, a sign of unity from Western allies as they continued to express their condemnation of Beijing’s treatment of Uighurs in the region.
China denounced the moves and attacked the European Union almost immediately, announcing its own sanctions against ten EU politicians and four entities for “maliciously spreading lies and misinformation.”
Guy Verhofstadt, a senior member of the European Parliament, even said that China’s decision to withdraw had “killed” a major investment agreement between Brussels and Beijing that has not yet been ratified. The agreement, which has been in place for years, is designed to rebalance trade with the world’s second largest economy.
Shortly after the Chinese sanctions were announced, the second largest group of lawmakers in the European Parliament said it would not hold any talks on the deal until measures are lifted.
The outburst comes after what was already tense a few days ago. Talks between the United States and China in Alaska sparked a tense confrontation late last week during what was the first face-to-face meeting between senior leaders on both sides since U.S. President Joe took office. Biden.
The news of the sanctions fueled a particularly hard day for tech stocks in Hong Kong. The Hang Seng Tech Index, which tracks 30 major technology companies, including Alibaba and Tencent, fell 2.6%. Alibaba (BABA) i Tencent (TCEHY) fell 0.5% and 0.8% each. Meituan and Xiaomi lost 5.2% and 4.1%, respectively.
Market concerns also seemed to hurt the Chinese internet giant Baidu, (TO START) which launched a secondary quote in Hong Kong to a lukewarm response on Tuesday its first trading day.
The $ 3.1 billion list of the company, which is already listed in New York, disappointed. It ended the day with 252.20 Hong Kong dollars ($ 32.47), less than 1% above its bid price of 252 Hong Kong dollars ($ 32.45). It was the largest secondary list in the city since then JD.com (JD) raised $ 4 billion last June, according to data provider Refinitiv.
“Battle lines are being drawn [the] The United States and China maintain dominance of Internet technology, “said Stephen Innes, chief global market strategist for the Sydney-based online broker Axi.” One has to think that last week’s less friendly start-up is likely to slow down [the] The United States could continue to slow down Chinese technology. “
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