Equities decline on lingering Sino-U.S. trade tensions

Updated 2018-04-04 11:14:03 China Daily

The Chinese A-share market dropped slightly on Tuesday, showing investors' lingering concerns over the prospects of Chinese technology and internet companies due to current U.S.-China trade tensions.

According to Shanghai-based financial information provider Wind, the listed internet companies reported the largest slump of 2.35 percent on average on Tuesday, while the benchmark Shanghai Composite Index fell 0.84 percent to close at 3,136.63. The Shenzhen component Index dropped 0.91 percent closing at 10,754.29.

Ding Zhenyu, senior investment consultant at Shaanxi Jufeng Investment Information, said that the slump in the U.S. market on Monday has partly resulted in the fluctuation of the A-share market on Tuesday. Nasdaq fell 2.74 percent on Monday and the S&P contracted by 2.23 percent.

"But we think that the A-share market has shaken off the negative impact of the trade tension between China and the United States," he said. "It can be predicted that the market will rebound strongly in the near future."

Ding suggested investors keep a close watch on the companies from the emerging industries that are still undervalued. Companies specializing in big data, cloud computing, artificial intelligence, high-end equipment manufacturing and biological medicine will help to boost the performance of the stock market.

Meanwhile, China's Nasdaq-like Growth Enterprise Market, which has attracted a large number of small and medium-sized innovative technology companies, dropped 1.46 percent to close at 1,872.47 on Tuesday.

Analysts from Hebei Yuan Da Security Investment Consulting wrote in a note that the decline mainly came from companies that witnessed intensive trading previously. But the big picture is still a looming strong rebound in the short term.

"The fluctuation will be temporary and a strong pickup will soon take place," according to the note.

As companies will soon release their annual fiscal results for 2017, investors can review and see their opportunities, according to Yuan Da.

While the investment strategies of large institutions such as Central Huijin Investment Ltd have started to take shape, high-end manufacturing and high-tech companies will be largely favored by these institutions, which should also influence the investment direction for individual investors.

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