China's stock markets slipped anew on Monday morning following their deepest one-week dive since February, with little support for a rebound as investors await the latest twist in the US-China dispute.
By lunch time, the Shanghai Composite index was down 20.65 points or 0.79 per cent at 2,586.26. China's blue-chip CSI300 index was down 0.82 per cent, with its financial sector sub-index lower by 0.98 percent.
Hong Kong's Hang Seng Index was down 1.01 per cent at 25,541.73, while Chinese H-shares listed in Hong Kong lost 1.18 per cent to 10,177.72. The smaller Shenzhen index was down 0.30 per cent and the start-up board ChiNext Composite index was weaker by 0.45 per cent.
Yi Gang, governor of the People's Bank of China, said over the weekend that China had further room to adjust interest rates and cut the reserve requirement ratio (RRR) for banks. The latest round of RRR cut took effect on Monday.
But ongoing worries about the US-China trade war, and possibility, albeit remote, of the United States naming China as a currency manipulator, still weighed on investors' appetite, said a director of research at a Hong Kong brokerage.
“You can see that in the lack of a rebound today,” he said. “The losses are smaller but there is not enough support for a recovery.”
Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.95 per cent, while Japan's Nikkei index was down 1.54 per cent. The yuan was quoted at 6.9183 per US dollar, 0.05 per cent weaker than the previous close of 6.9146.
The largest percentage gainers in the main Shanghai Composite index were Yunnan Metropolitan Real Estate Development Co Ltd , up 10.16 per cent, followed by Shenzhen Sunxing Light Alloys Materials Co Ltd , gaining 10 per cent and Xilinmen Furniture Co Ltd , up by 9.43 per cent.
The largest percentage losses in the Shanghai index were Ningbo Jifeng Auto Parts Co Ltd , down 10.02 per cent, followed by Zhejiang XinAn Chemical Industrial Group Co Ltd , losing 9.82 per cent and Qingdao Haier Co Ltd, down by 8.89 per cent.
So far this year, the Shanghai stock index is down 21.17 per cent, while China's H-share index is down 12.0 per cent. Shanghai stocks have declined 7.6 per cent this month.
Top gainers among H-shares were CSPC Pharmaceutical Group Ltd , up 2.56 per cent, followed by ZhongAn Online P & C Insurance Co Ltd , gaining 2.19 per cent and CNOOC Ltd , up by 1.93 per cent.
The three biggest H-shares percentage decliners were Great Wall Motor Co Ltd, which has fallen 5.18 per cent, Dongfeng Motor Group Co Ltd, which has lost 5.06 per cent and Guangdong Investment Ltd , down by 4.48 per cent.
About 6.96 billion shares have traded so far on the Shanghai exchange, roughly 58.6 per cent of the market's 30-day moving average of 11.88 billion shares a day. The volume traded was 17.01 billion as of the last full trading day.
As of 04:09 GMT, China's A-shares were trading at a premium of 22.68 per cent over the Hong Kong-listed H-shares. In Hong Kong, the sub-index of the Hang Seng index tracking energy shares rose 1.2 per cent, while the IT sector fell 2.6 per cent.
Top gainer on Hang Seng was Sino Biopharmaceutical Ltd , up 3.23 per cent, while the biggest loser was AAC Technologies Holdings Inc , which was down 6.04 per cent.