A deadlock in negotiations on Monday weighed on the market sentiment, with Chinese official media saying the Chinese economy will not be “weakened by a little tariff increase”.
“The market will continue consolidating and swinging as long as the negotiation goes on” in the near term, analysts at Chinese brokerage Industrial Securities, led by Wang Delun, wrote in a report on Monday.
“There’s now greater uncertainty as we enter the final stage of the trade negotiation.”
The yuan also weakened sharply under trade war concerns. Offshore yuan eased against the US dollar to 6.9054, its weakest level since December.
Insurers and securities brokerages retreated broadly. A gauge tracking seven listed insurers fell 3.6 per cent amid investor concern that a recent consolidation in stocks may weigh on insurance companies’ investment returns, according to financial data services provider Wind.
China Life Insurance, the country’s biggest insurer, lost 5.9 per cent. New China Life Insurance dropped 3.9 per cent.
An index tracking 43 stock brokerages lost 2.2 per cent. Harbin Hatou Investment declined 4.1 per cent, and Changjiang Securities fell by 3.7 per cent.
Carmakers also declined across the board, after industry data showed vehicle sales decreased 17 per cent from a year earlier for an eleventh consecutive month in April.
Beiqi Foton Motor lost 4.9 per cent and Anhui Jianghuai Automobile Group sank 3.9 per cent. SAIC Motor slid 3.1 per cent.
Visual China Group, which was earlier at the centre of a storm for claiming copyrights for publicly available images such as China’s national flag and emblem, bucked the downward trend and jumped 5 per cent to 20.42 yuan in Shenzhen.
The image provider said in an exchange statement its website had resumed services on Sunday following improvements to its content censorship and copyright operations.
Its website was ordered by the internet authority in Tianjin to shut down last month after the company slapped a copyright on the first picture of a black hole.
Chinese new materials maker Kangde Xin Composite Material Group tumbled 4.9 per cent, after it said in a letter to employees on Monday the recent arrest of Zhong Yu, its controlling shareholder, “will not cause a direct effect on the company’s operation”, according to Chinese media.
The police arrested and took “criminal compulsory measures” against Yu on Sunday, after the company said last week its auditor could not verify whether it had 12.2 billion yuan in bank deposits as claimed earlier.
Kangde Xin defaulted on two corporate bond payments in December, which triggered an investigation by the securities regulator.
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