China, Hong Kong stocks weaken as US tariff deadline looms
As of the midday trading break, China's blue-chip CSI300 Index slipped 0.6 per cent, while the Shanghai Composite Index edged down 0.2 per cent.
In Hong Kong, the benchmark Hang Seng was down 0.5 per cent and the Hang Seng China Enterprises Index weakened 0.4 per cent.
Although China is not at risk of being slammed by imminent higher tariffs, thanks to the trade truce with the US, sentiment was still largely subdued as the tariff deadline looms.
The US is now close to finalizing several trade agreements in the coming days and will notify other countries of higher tariff rates by July 9, US President Donald Trump said on Sunday, with the higher rates set to take effect on August 1.
"Markets are set to see more volatility from here," and it's unlikely to see a sustained uptrend with the expiring tariff deadline and trade policy uncertainties impacting risk appetite, analysts at Huatai Securities said in a note.
Leading the onshore markets' losses on Monday, the AI sector declined 1.2 per cent and the rare earth sector lost 0.4 per cent with trade tensions looming.
The medical services sector weakened 0.8 per cent after China's finance ministry said on Sunday it was restricting government purchases of medical devices from the European Union in retaliation.
Helping offset the losses, Chinese property developers listed in mainland and Hong Kong, climbed by 1.4 per cent and 0.8 per cent, respectively, after the housing regulator vowed to put a floor on dropping home prices.
Traders are also watching for China's key inflation data on Wednesday to gauge the health of the world's second-largest economy in the face of persistent deflation pressure and trade risks.
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