The three biggest H-shares percentage decliners were CSPC Pharmaceutical Group Ltd, which was down 3.7 percent, PetroChina Co Ltd, which fell 3.3 percent and China Shenhua Energy Co Ltd, down by 2.9 percent. At close, China's A-shares were trading at a premium of 16.78 percent over the Hong Kong-listed H-shares. The short and one-factor leveraged Hang Seng index, which is designed to replicate the payoff of a short or leveraged portfolio and is linked to the movements of the Hang Seng Index, was higher by 0.7 percent on the day at 5,118.88 points.
The International Monetary Fund (IMF) trimmed its global growth forecasts and a survey showed increasing pessimism among business chiefs as trade tensions and uncertainty loomed on Monday, ahead of the World Economic Forum in Davos. The IMF's warning came shortly after China reported its slowest growth in 28 years for 2018, amid the trade war with the United States and cooling domestic demand.
US President Donald Trump attributed China's economic slowdown to US trade policies in a tweet https://bit.ly/2CCBsGM on Monday, and said it "makes so much sense for China to finally do a Real Deal, and stop playing around!" The two sides agreed to a 90-day truce in the trade war at the start of last December.
In a move certain to ratchet up tensions with China, the US will proceed with the formal extradition from Canada of Huawei executive Meng Wanzhou, Canada's ambassador to the US told the Globe and Mail on Tuesday.
China responded on Tuesday afternoon, saying that the US and Canada have abused their extradition agreement in this case. Tencent Holdings Ltd, the most actively-traded name in Hong Kong's stock market, missed out on a third batch of video games approvals in China after a long freeze on such approvals for much of last year. The company's stock edged down 1.2 percent. With Tencent in trouble, and as US-China relations may sour again, the information technology sub-index lost 1.5 percent and shares of I.T. hardware makers dropped 1.1 percent.