China and Hong Kong stocks followed other Asian markets lower on Wednesday morning, as political turmoil in Washington knocked Wall Street and dented risk appetite in global markets. China’s blue-chip CSI300 index fell 0.2 percent, to 3,404.13 points by lunch break, while the Shanghai Composite Index lost 0.2 percent, to 3,098.60 points.
In Hong Kong, the Hang Seng index dropped 0.2 percent, to 25,234.34 points, while the Hong Kong China Enterprises Index lost 0.7 percent, to 10,306.30. Equities in Asia took cues from Wall Street, where the Dow and S&P 500 both sank about 1.8 percent overnight following reports alleging that U.S. President Donald Trump tried to interfere with a federal investigation into ties with Russia.
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The allegations have thrown doubt on the future of the pro-growth policies that Trump promised and has intensified a crisis facing his administration. The U.S. Justice Department named former FBI chief Robert Mueller on Wednesday as special counsel to investigate alleged Russian interference in the 2016 U.S. election and possible collusion between Trump’s campaign and Moscow.
On Thursday, shares in most in China and Hong Kong lost ground. China’s property stocks fell, even as newly released data showed that home prices in China rose 0.7 percent in April despite tougher curbs aimed at driving speculators out of what had been a red hot market.
Bucking the trend, IT stocks in Hong Kong jumped nearly 3 percent, led by Tencent Holdings, which jumped about 4 percent to record highs after brokers including Nomura and Jefferies raised their target prices.