Hong Kong stocks erased gains amid concerns that escalating competition among China’s leading carmakers and e-commerce operators will hurt margins and prompt investors to retreat.
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The Hang Seng Index fell 0.2 per cent to 23,241.23 at the local noon trading break on Tuesday, reversing an earlier gain of as much as 0.4 per cent. The Hang Seng Tech Index lost 0.6 per cent. On the mainland, the CSI 300 Index slipped 0.3 per cent while the Shanghai Composite Index declined 0.7 per cent.
BYD tumbled 3.9 per cent to HK$408.80 after cutting prices on its stable of EV models to clear inventory. Geely Auto slumped 3.2 per cent to HK$17.80 and Li Auto slid 2.4 per cent to HK$107.30. Meituan lost 0.1 per cent to HK$129.30 after warning about the impact of business rivalry. E-commerce platform operator JD.com weakened 3.2 per cent to HK$125.50 while Alibaba Group Holding fell 0.5 per cent to HK$116.30.
“There are not many bright spots in first-quarter results and a de-escalation of the trade tension also means no visible stimulus from the government side,” said Huang Zicen, an analyst at China Post Securities. “The market will be stuck in sideways trading.”
03:53
China, US slash most tariffs on each other after first round of trade talks
China, US slash most tariffs on each other after first round of trade talks
Stocks extended a retreat from a two-month high as investors switched their focus to corporate earnings. Meituan, China’s biggest on-demand delivery platform operator, warned of stiffer competitions and compressed margins in its first-quarter report card on Monday. BYD’s shock cut prices triggered a rout in EV peers this week.
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