Chinese Stocks in Hong Kong and Mainland Witness Decline Amid Tariff Concerns

Wednesday, 5 February 2025, 02:20

South China Morning Post reports that Chinese stocks lost ground in both Hong Kong and mainland markets as investors assessed ongoing tariff concerns. The Hang Seng Index dropped 1% while major mainland indices also showed losses, reflecting caution among traders. Technology sectors showed mixed results, further complicating market dynamics.
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Chinese Stocks in Hong Kong and Mainland Witness Decline Amid Tariff Concerns

Market Overview Amid Tariff Fluctuations

Mainland China’s markets dipped on Wednesday, along with Hong Kong stocks, as investors weighed trade tensions with the US and hype around the domestic artificial-intelligence sector.

The Hang Seng Index fell 1 per cent to 20,586.54 at 9.50am local time, surrendering some of Tuesday’s strongest gain in three months. The Hang Seng Tech Index dropped 1.2 per cent.

Mainland Market Dynamics

Mainland benchmarks opened up before losing ground, with the CSI 300 Index falling 0.2 per cent and the Shanghai Composite Index declining 0.3 per cent. Technology stocks in both indices outperformed.

  • Shenzhou International Group Holdings sank 5.6 per cent to HK$59.40.
  • Nongfu Spring dipped 4.7 per cent to HK$35.70.
  • Haidilao International Holding dropped 4.4 per cent to HK$14.30.

Sector Performance

Tech stocks were largely weaker, with Kingsoft Cloud slumping 9.3 per cent to HK$7.78 and Meitu dipping 6.4 per cent to HK$4.40. Meanwhile, Lenovo Group rose 3.8 per cent to HK$10.90, and BYD Electronic climbed 1.8 per cent to HK$44.65.

Investors returned to mainland China’s A-share markets after the Lunar New Year holiday, flocking to tech companies with a focus on AI, sparked by growing interest in DeepSeek.

Tariff Implications

Following the US imposing 10 per cent tariffs on Chinese goods, analysts predict that several industries might suffer, including home appliances and electric vehicles. Kai Wang, Morningstar’s Asia equity market strategist, noted that the ongoing uncertainty in the US-China trade war could create volatility for the Chinese market.

As focus shifts to the upcoming call between US President Donald Trump and China, there are hopes that it could mitigate some risks.

Regional Market Performance

Elsewhere, major Asian benchmarks were stronger: Japan’s Nikkei 225 rose 0.2 per cent, South Korea’s Kospi gained 1 per cent, and Australia’s S&P/ASX 200 advanced 0.7 per cent.


This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


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