China stocks fell in the first day of trading since the U.S. slapped tariffs on US$200 billion in Chinese goods.

The Shanghai Composite Index lost 0.6 per cent at the close. A measure of developers slid 2.8 per cent as Guangdong province mulls a proposal to scrap a housing pre-sale system that real estate companies use to finance projects. Hong Kong’s markets were closed Tuesday for a holiday.

The benchmark Shanghai gauge has tumbled 16 percent this year, putting it among the worst performers worldwide. Investors have been unnerved by the escalating China-U.S. trade war, a slowing economy and a government campaign to cut debt. The Shanghai index rose the most in two years last week on China’s plan to cut taxes and lift consumption, while state-backed funds were also seen buying equities.

The CSI 300 Index of China’s large caps fell 0.9 per cent, while the ChiNext Index of small-cap and tech shares slipped 0.4 per cent.

China has responded to the tariffs imposed by the Trump administration with duties of its own on US$60 billion in U.S. products. The Chinese government called off planned talks with U.S. officials as the consensus grows in Beijing that substantive discussions will only be possible after U.S. midterm elections in November, according to people familiar with the matter.

Future Land Holdings Co. and Poly Real Estate Group Co. slumped at least 6 percent to be among the worst performers on the CSI 300 measure. Guangdong’s housing authority is seeking the views of developers on phasing out the pre-sale system, which for decades has allowed home builders to receive funding upfront by selling apartments before construction has been completed, according to a document circulated to property firms and seen by Bloomberg News.

FTSE Russell plans to announce the inclusion of China A shares into its indexes on Thursday Beijing time, according to people familiar with the matter. China has been informed by the U.K.-based index compiler of its decision, the people said, asking not to be named as they’re not authorized to talk to the media.

China’s equities would attract about US$13.6 billion at a weighting of 0.8 per cent, China Merchants Securities Co. analyst Zhang Xia wrote in a note dated Monday. Inclusion would provide some support for an A-share rebound, the note added.

HNA Technology Co. slumped by the 10 percent daily limit as it resumed trading Tuesday. HNA Group Co.’s seven listed units have lost $10 billion in total market value since trading suspensions started being lifted months ago. The conglomerate is paying down one of Asia’s largest debt piles.

Leshi Internet Information & Technology Corp. surged by the 10 percent daily limit after a unit of Sunac China Holdings Ltd. said it will take a 240.9 million yuan stake in Leshi unit Lerong Zhixin.

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