FX.co ★ Hong Kong Equities Under Pressure

Shares in Hong Kong experienced a notable decline, falling by 487 points, or 2.0%, to a level of 23,417 on Tuesday morning. This downturn erased the previous session's gains, driven by concerns surrounding recession risks in the United States and deflationary pressures in China. S&P Global has expressed concerns that Beijing's stimulus measures might not sufficiently counterbalance the negative effects of new U.S. tariffs in the context of slowing economic growth. Concurrently, U.S. futures saw a downward trend following projections by Fed official Raphael Bostic, who forecasted only a single interest rate cut this year, attributing this to rising inflation linked to tariff issues. Limiting further declines, the Chinese government has committed to implementing more proactive macroeconomic policies this year. Additionally, President Trump indicated that some nations might receive exemptions from the planned reciprocal tariffs. All sectors experienced dips, with technology, consumer, and financial sectors suffering the most. Meituan shares dropped by 3.4% following a marginal earnings shortfall. Xiaomi shares decreased by 5.4% after raising $5.5 billion through an upsized share sale, and Citi has issued a caution regarding potential short-term dilution. The electric vehicle sector was also affected, with significant declines seen in BYD Electronic (-9.0%), Geely Auto (-4.2%), and Li Auto (-3.8%).