Trade Tensions and Auto Wars Shake Chinese Markets

Chinese and Hong Kong stocks experienced declines amid fears of escalating trade tensions with the U.S. and intensifying competition among automakers. Concerns over U.S. tariffs and potential restrictions on chip sales added to market uncertainties, affecting major stock indices and leading auto stocks to plunge.

China and Hong Kong stock markets suffered losses on Thursday, driven by rising concerns over a trade conflict with the United States and a looming ban on chip sales to China. This comes as the automotive price war in China shows signs of intensifying.

The blue-chip CSI 300 index closed 0.88% lower, while the Shanghai Composite index fell by 0.43% to 3,295.70. Auto stocks were the hardest hit, plunging over 2% as reports surfaced of pressure from automakers like BYD on suppliers to reduce prices.

In Hong Kong, the Hang Seng Index dropped by 236.17 points, or 1.2%, to 19,366.96. Analysts warned that additional tariffs proposed by former President Trump could significantly harm both China's economy and its stock markets in the coming years, compounding market pressures following reports of potential U.S. curbs on semiconductor sales.

(With inputs from agencies.)