Hong Kong stocks tumbled on Monday due to escalating geopolitical strains between the US and China along with downbeat property sales figures weighing on market mood.
The Hang Seng Index finished 0.6 percent down at 23,157.97 following a drop of up to 2.7 percent during the session. Meanwhile, the Hang Seng Tech Index declined by 0.7 percent. Trading remained suspended in mainland China due to the Dragon Boat Festival holiday, with activities set to restart on Tuesday.
The stock of electric vehicle maker Li Auto plummeted by 2% to reach HK$110, whereas competitor BYD decreased by 1.9%, settling at HK$385.40. Shares of short video service provider Kuaishou Technology fell by 1.6% to trade at HK$52.45, and sports apparel company Anta Sports Products declined by 1.3% to land at HK$94.25.
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Sands China, a casino operator, saw its shares increase by 4.3% to reach HK$16.08, whereas Galaxy Entertainment Group climbed by 1.8% to hit HK$34. This rise came as gambling revenues in Macau surged 5% year-over-year in May, marking the highest figure since January 2020.
After U.S. President Donald Trump stated on Friday that China had breached significant portions of the trade tariff pact—without offering specifics—investors revised their previously positive outlooks. Additionally, the Trump administration’s comprehensive measures against China, such as restrictions on chip exports related to AI technology and proposals to cancel certain student visas from China, further dampened market sentiments.
On Monday, Beijing responded by stating that the US actions contravene the agreements made during the Geneva discussions and urged Washington to promptly "rectify" its behavior.
"If the US insists on acting unilaterally and continues to harm China's interests, China will resolutely take strong measures to safeguard its legitimate rights," a spokesperson from the Ministry of Commerce said on Monday.
Nomura analysts, including Jing Wang, noted in a report on Monday that the latest conflict could potentially cloud the prospects of U.S.-China trade discussions throughout the 90-day ceasefire. They also pointed out that the strategic separation between the nations appears to be escalating unavoidably.
In May, the property sales of China’s leading 100 developers increased by 3.5 percent compared to the previous month, as reported by data from the China Real Estate Information Corporation. However, this growth fell short of expectations since May typically represents one of the strongest periods for sales among developers.
In other parts of the Asia-Pacific region, Japan's Nikkei 225 declined by 1.3 percent, and Australia's S&P/ASX 200 dropped by 0.2 percent. However, South Korea's Kospi rose slightly by 0.1 percent.
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