Chinese tech companies sink as trade tensions rise again
ZTE (ZTCOF) led the way with a nearly 8% drop. The losses came after the United States moved forward with a ban that restricts federal purchases from five Chinese tech companies, including Huawei and ZTE, in an escalating confrontation between the two countries.China’s Ministry of Foreign Affairs slammed the decision on Thursday, calling it “discriminatory and unfair” and vowing to take “all necessary steps to protect legitimate interests of Chinese companies.””Fears have escalated and investors worry the trade confrontations are getting increasingly worse,” said Mark Huang, an analyst at Bright Smart Securities in Hong Kong.Also weighing on tech shares was a report from Bloomberg that said the White House plans to delay a decision on granting licenses that would allow US companies to continue selling some technology to Huawei.China’s Shanghai Composite Index (SHCOMP) erased earlier gains and dropped 0.7%. Hong Kong’s Hang Seng Index (HSI) fell 0.7%. But other Asian markets rose slightly, continuing to recover their losses from earlier this week. Japan’s Nikkei rose 0.4%, following stronger than expected economic data, while South Korea’s Kospi (KOSPI) climbed 0.9%. Here are some of the other big moves at 4:00 p.m. Hong Kong time:On Friday, the Chinese central bank guided the yuan lower for a seventh straight session. It set the daily fixing at the weakest level since April 2008. The rate was set at 7.0136 yuan per US dollar. In onshore trading, the yuan was slightly weaker than Thursday: One dollar can now buy 7.05 yuan. In offshore trading, where the yuan trades more freely, the currency was flat at 7.08 yuan per dollar.Japan’s GDP grew at an annualized 1.8% in the second quarter, beating market estimates, official statistics showed on Friday. China’s consumer price index rose 2.8% in July, which was slightly better than market expectations. The country’s producer price index dropped 0.3%, according to government data released Friday. Pork prices surged 27% because of the African swine fever outbreak.Tencent (TCEHY), the Chinese social media and online game giant, dropped 0.7% despite getting regulatory approval to sell two new video games in China.China’s largest nuclear power operator, CGN Power, set the price of its upcoming listing in Shenzhen. It wants to raise 12.6 billion yuan ($1.8 billion). CGN Power already trades in Hong Kong, where it was up about 0.5% Friday.Swire Properties, which owns several major shopping malls in Hong Kong, said Thursday in an earnings report that uncertainties related to trade and the weakness of the yuan have affected retail spending in Hong Kong. The company added that the city’s protests have also had “some effect” on retail sales at malls, and that sales are likely to continue to be hit if the protests continue. Shares were down 3.6% on Friday.CNN Business’ Anneken Tappe contributed to this report.
