Chinese stocks plummet after consulate closures

Chinese stocks slumped on Friday as investors fret over a Sino-US consulate clash.

The benchmark Shanghai Composite Index plunged 3.86 percent to 3,196.77 points, and the blue-chip CSI300 index tumbled 4.39 percent to 4,505.59 points. The Shenzhen Component Index nosedived 5.31 percent while the tech-heavy start-up board ChiNext Composite index plummeted 6.14 percent.

The new STAR 50 Index, which tracks the 50 biggest companies listed on the tech-heavy STAR Market, plummeted 7.02 percent.

Turnover on the two major bourses expanded to 1.33 trillion yuan (US$189.4 billion). Mainland markets saw a net outflow of 14.41 billion yuan in overseas capital via Stock Connect schemes linking Shanghai and Shenzhen with Hong Kong.

All sectors lost with losers outnumbering gainers by 1,578 to 109 on the Shanghai bourse, and 2,091 to 177 in Shenzhen.

Stock brokerages suffered the biggest losses of the day. Share prices in the securities sector crashed 6.8 percent on average.

The slump came after China ordered the US to shut down its consulate in Chengdu, in southwest China’s Sichuan Province, a move China deemed a tit-for-tat response to Washington’s recent closure of the Chinese consulate in Houston, Texas.

“China has decided to revoke the license for the establishment and operation of the US Consulate General in Chengdu and put forward specific requirements for the consulate general to stop all business and activities,” the Chinese foreign ministry said in a statement on Friday morning.

Earlier on Wednesday, the US ordered a Chinese consulate in Houston to shut down within 72 hours. US President Donald Trump said he could shutter additional Chinese consulates following the closure of the consulate in Texas.