Hong Kong stocks retreat from gains sparked by China-US trade breakthrough
Hong Kong
stocks fell on Tuesday after notching the biggest gain in two months a day earlier, as traders digested the apparent breakthrough in the China-US trade talks.
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The Hang Seng Index dropped 1.2 per cent to 23,271.62 as of 9.58am local time, giving up some of Monday's 3 per cent gain. The Hang Seng Tech Index dropped 2 per cent.
On the mainland, the CSI 300 Index climbed 0.3 per cent, and the Shanghai Composite Index added 0.4 per cent.
BYD Electronic International slid 4.1 per cent to HK$36.40, and Sunny Optical Technology Group slumped 3.5 per cent to HK$71.35. Meituan lost 3 per cent to HK$140.20 and smartphone maker Xiaomi retreated 2.9 per cent to HK$49.05.
Traders took some profit after the upsurge in the Hang Seng Index on Monday, which was spurred by a tentative trade deal between China and US. While the de-escalation dispelled some gloom for global growth and boosted demand for risk assets, some economists warned of more potential clashes.
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'It might be just the beginning of the inevitable collision of the two largest economies,' said Lu Ting, chief China economist at Nomura in Hong Kong. 'After enjoying a rebound, markets perhaps need to ponder the medium to long-term risk. The US is still on the offensive, but China might learn much better how to dig itself in for the future attack.'
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