March 22, 2018 / 8:27 AM / in a month

Tech firms drag down Hong Kong shares as trade war fears weigh

* Hang Seng index ends down 1.1 pct

* China Enterprises index HSCE falls 0.7 percent

* HSI financial sector sub-index down 0.9 pct, property sector down 0.6 pct

March 22 (Reuters) - Hong Kong stocks extended losses to end lower on Thursday, hurt by a slump in shares of IT companies, amid rising trade war fears and as investors digested the impact of a rate hike by the U.S. Federal Reserve. ** At close of trade, the Hang Seng index was down 1.1 percent at 31,071.05, while the Hang Seng China Enterprises index fell 0.8 percent to 12,427.55. ** U.S. President Donald Trump will announce tariffs on Chinese imports on Thursday, a White House official said, in a move aimed at curbing theft of U.S. technology and likely to trigger retaliation from Beijing and stoke fears of a global trade war. ** “Most Chinese corporates seem to be quite resilient against a potential trade war given the high share of domestic revenue,” said Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis. “However, there are certain sectors which will be relatively more affected, such as information technology and consumer durables.” ** An IT sub-index tumbled 4.2 percent, led by Tencent posting its worst day since early February. ** Tencent closed down 5 percent on Thursday after the Chinese internet giant missed quarterly revenue estimates and warned that planned investments may hurt margins. ** A sub-index tracking consumer goods makers lost 1 percent on Thursday. ** Investors also pondered the impact of the Fed’s rate hike on Wednesday. ** The Hong Kong Monetary Authority (HKMA) raised its base rate charged through its overnight discount window by 25 basis points (bps) on Thursday to 2.00 percent, in lockstep with the U.S Federal Reserve. ** The move came as the Hong Kong dollar fell to a fresh 33-year low, and looked set to test the low end of its trading band, prompting the central bank to reaffirm it would intervene to defend the financial hub’s currency peg. ** The top gainer on Hang Seng was Hang Lung Properties Ltd up 1.74 percent, while the biggest loser was Tencent Holdings Ltd, down 4.89 percent. ** As of the previous trading session, the Hang Seng index was up 5 percent this year, while China’s H-share index was up 6.9 percent. As of the previous close, the Hang Seng had risen 1.85 percent this month. ** At close, China’s A-shares were trading at a premium of 27.15 percent over the Hong Kong-listed H-shares. (Reporting by the Shanghai Newsroom)

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