Trade Tensions and Gold Prices Shake Chinese Stocks

Stocks in mainland China and Hong Kong faced declines on Wednesday, influenced by a downturn in gold shares and persistent trade tensions between China and the United States.

By midday, the Shanghai Composite index had decreased by 0.44% to 3,899.05 points, and the blue-chip CSI300 index had dropped 0.7%. Gold stocks were among the hardest hit, with the CSI non-ferrous metal industry sub-index falling 2.1% due to a dip in global gold prices. Western Region Gold notably dropped by 6.03% by the midday break.

While geopolitical uncertainties and anticipated U.S. interest rate cuts helped gold prices surge over 50% this year, concerns linger regarding the planned Trump-Xi meeting, which may be subject to change. In Hong Kong, the Hang Seng Index fell 1.27%, accompanied by a 2.12% slide in the city's tech index. Global investment banks no longer expect significant monetary stimulus from China this year, as analysts predict a focus on fiscal measures instead.