Hong Kong: HANG SENG INDEX (.HSI) stumbled in June amid intensifying U.S.-China trade frictions

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Hong Kong: HANG SENG INDEX (.HSI) stumbled in June amid intensifying U.S.-China trade frictions

Hong Kong: HANG SENG INDEX (.HSI) stumbled in June amid intensifying U.S.-China trade frictions

Asian equity markets stumbled in June amid intensifying U.S.-China trade frictions, a development that’s also made the outlook for regional stocks less rosy than at the beginning of this year, according to strategists.

Apart from the souring of risk appetite among investors due to fears of a potential trade war, recent declines in the Asian markets also come against the backdrop of the synchronized global growth story beginning to show signs of cracks and a firmer dollar. All of that has seen a number of institutions pare back their year-end and 12-month targets for markets in the region.

After a wobbly start, U.S. stocks mounted a broad rally, shaking off two consecutive weekly losses.

Growing jitters in recent weeks over a stepped-up trading dispute between the world’s two largest economies had weighed on the markets well ahead of Friday, when Beijing and Washington launched dueling tariffs on billions in goods.

Analysts at Morgan Stanley see Hong Kong as a market that’s “particularly at risk,” highlighting the likelihood of “a further sharp drawdown” for the benchmark Hang Seng Index.

Analysts and strategists at the bank in June cut their 12-month target for the Hang Seng Index to 27,200 from their previous target of 30,350. The new target represents around 3 percent more in declines compared to the current level the index traded at as of Asia Friday morning trade. The benchmark is currently in correction territory, down roughly 16 percent from its January highs at its last close.

Hong Kong’s Hang Seng index gained 0.5 percent, while South Korea’s Kospi added 0.7 percent. Tokyo’s Nikkei 225 jumped 1.1 percent after a four-day losing streak. Australia’s S&P-ASX 200 rose 0.9 percent.

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