Stock markets fell again as US President Donald Trump rejected renegotiating a trade deal with China even as mainland factory prices fell at the sharpest rate in four years.
Trump said he opposed looking again at the China-US phase one trade deal after the state-run Global Times reported that some government advisers in Beijing were urging fresh talks and possibly invalidating the agreement.
At the same time, the Trump administration asked US federal retirement funds not to invest in Chinese equities. In fact, US funds have already invested US$4 billion (HK$31.2 billion) in such equities.
Fox Business claimed the move was related to how Beijing has handled the Covid-19 virus, which has upset Trump.
In Beijing, meanwhile, finance ministry officials announced a list of 79 US products that will be eligible for import tariff waivers for 12 months, including ore of rare-earth metals.
Also reining in investors, China's producer price index for April dropped by 3.1 percent from 12 months ago compared with a 1.5-percent decline in March.
But the consumer price index rose 3.3 percent over 12 months in April, though that compared with a 4.3-percent year-on-year increase in March, mainly due to slowing food price growth.
Food prices rose 14.8 percent last month, led by a 96.9 percent jump in pork prices.
In the United States, the consumer price index tumbled 0.8 percent month-on-month in April, the largest decline since December 2008, after falling 0.4 percent last in March, weighed down by a plunge in demand for gasoline and services including airline travel as people stayed home during the coronavirus crisis.
And the market forecast that global shipment of 5G iPhone will be only 80 million this year out of an expected 200 million total 5G phone shipment, according to Bloomberg analyst Anthea Lai. Bloomberg Intelligence predicted both 5G iPhone shipments and total 5G phone shipments for 2020 would fall shy of market expectations.
The Hang Seng Index closed 356 points lower at 24,245 points yesterday while the onshore yuan weakened by 22 basis points to 7.0886 per US dollar.
China’s producer price index for April fell by 3.1 percent. BLOOMBERG
