China stocks extend retreat as Sino-U.S. tensions weigh

SHANGHAI, Dec 8 (Reuters) - China shares closed lower for a second straight session on Tuesday as Sino-U.S. tensions weighed on the market, with financial and transport stocks leading the decline.

** The blue-chip CSI300 index fell 0.3% to 5,009.88, while the Shanghai Composite Index slipped 0.2% to 3,410.18.

** Among sectors, the CSI300 financials and the transport indexes both closed down 0.7%.

** The United States on Monday imposed financial sanctions and travel ban on 14 Chinese officials over their alleged role in Beijing’s disqualification last month of elected opposition legislators in Hong Kong.

** Chinese Foreign Minister Wang Yi assured U.S. executives during a videoconference on Sunday that Beijing remained committed to the Phase 1 trade deal with the United States, the head of the U.S.-China Business Council said.

** Some market participants expected limited impact from fresh Sino-U.S. tensions on the A-share market.

** “The impact from Sino-U.S. relations (on the market) could decrease as the post-Trump era nears,” said Hu Yunlong, chief investment officer at Beijing Kaixing Asset Management Co.

** Hu said the recent retreat was mainly due to “year-end effect”, where investors turn more cautious and book profits, adding that there were still concerns about the coronavirus outbreak abroad.

** The market could continue to be rangebound as the year-end approaches when liquidity conditions become relatively tight, Wanlian Securities said in a note.

** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.1%, while Japan’s Nikkei index closed down 0.3%.

** At 07:07 GMT, the yuan was quoted at 6.5375 per U.S. dollar, 0.11% weaker than the previous close of 6.53.

** As of 0708 GMT, China’s A-shares were trading at a premium of 45.88% over the Hong Kong-listed H-shares. (Reporting by Shanghai Newsroom; Editing by Subhranshu Sahu)