China FXI ETF under pressure from Trump’s trade tactics

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Investors monitor stock prices at a securities company in Jiujiang, China, June 19, 2018.

An exchange-traded fund tracking shares of large Chinese companies traded in Hong Kong has posted its longest losing streak since 2012.

The iShares China Large Cap ETF (FXI) closed more than 2 percent lower Thursday. That marks 11 straight days of decline for the first time since a 13-day losing streak ended May 18, 2012.

The prolonged sell-off comes amid escalation in a tit-for-tat trade dispute between the U.S. and China.

President Donald Trump said late Monday that he has asked the U.S. trade representative to identify $200 billion worth of Chinese goods for an additional 10 percent tariff. The announcement followed China’s announcement of planned tariffs on $50 billion worth of U.S. goods on Friday, in retaliation against the Trump administration’s list of duties on $50 billion of Chinese goods released earlier that day. A portion of those tariffs are initially set to take effect July 6.

The S&P 500 remains more than 1.5 percent higher for June, while the Shanghai composite is down 7 percent and Hong Kong’s Hang Seng index is down more than 3.5 percent.

Among FXI’s components, lens manufacturer Sunny Optical is the worst performer so far this week, down more than 12.5 percent. The stock has soared more than 100 percent over the last 12 months.

Citic Securities, a major Chinese investment bank, was the second-worst performer, down nearly 10.8 percent for the week so far. Its shares are unchanged over the last 12 months.

Chinese telecom equipment giant ZTE is the third-worst performer this week, down more than 10.5 percent. The shares plunged after breaking a near two-month trading halt last week in the wake of settlement with the U.S. over sanctions violations.

Chinese tech giant Tencent, by far the largest company in FXI, has fallen 3 percent so far this week. The stock has run up 41 percent over the last 12 months.

— CNBC’s Gina Francolla contributed to this report.

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