The Hang Seng tumbled 319 points, or 1.4%, to close at 23,282 on Monday, erasing gains from the previous session as widespread losses hit the consumer, technology, and financial sectors.
Hang Seng under pressure at finish
The selloff was triggered by renewed trade tensions after U.S. President Trump threatened to impose a 25% tariff on iPhones not manufactured in the United States—remarks that sent ripples through the tech sector. Trump later added that South Korean tech giant Samsung could face similar treatment, further unnerving investors. iPhone supplier Luxshare dipped 0.2% on the news, while other hardware and component makers also struggled.
The electric vehicle sector took a heavy blow, led by a steep 9% plunge in BYD shares after the company launched aggressive discounting in a bid to boost sales, raising concerns about margin pressures. The move dragged down several other EV makers, including Geely Auto (-8.6%), Li Auto (-4.0%), NIO (-3.5%), and Xpeng (-4.4%), as investors reassessed the sector's pricing power and profitability.
Uncertainty ahead of China industrial profits data
Investor caution was further compounded by uncertainty ahead of China’s industrial profits data for April, with many market participants opting to trim exposure amid a murky macroeconomic outlook. However, the day’s losses were partially cushioned by a late-session rebound in U.S. futures after President Trump delayed the implementation of a proposed 50% tariff on EU goods to July 9 from June 1, signaling a possible window for renewed negotiations.
Strong IPO momentum in Hong Kong also helped stem deeper declines. Financial Secretary Paul Chan noted that capital raised through IPOs in 2025 has already reached HKD 76 billion—seven times higher than the same period last year and nearly 90% of the total raised throughout 2024. This robust fundraising activity is seen as a vote of confidence in the city’s financial markets, providing a rare bright spot amid global volatility.
