[ET Net News Agency, 26 May 2025] US President Donald Trump has announced plans to impose a 50% tariff on goods from the European Union, causing market turbulence and a decline in US stocks on Friday. However, tensions eased as both sides softened their stance, with the implementation of the tax plan postponed until 9 July. The Hang Seng Index opened nearly 100 points lower this morning, but following a sell-off in Meituan (03690) and a sharp drop in automotive stocks, the index's midday loss widened to 235 points or 1%, closing at 23,366, with turnover exceeding HKD 127.7 billion. The Hang Seng China Enterprises Index reported 8,474, down 109 points or 1.3%, while the Hang Seng Tech Index reached 5,177, down 69 points or 1.3%.
"Wan Kong Shing: US tariffs on EU is likely to be moderate, short-term negative impact"
With the Hang Seng Index facing downward pressure, Trump's threat to impose a 50% tariff on the EU and his warning to companies like Apple and Samsung to relocate production to the US have added to market concerns. Following last Friday's US stock decline, Hong Kong stocks also experienced selling pressure, with the Hang Seng Index dropping over 200 points after opening nearly 100 points lower. Wan Kong Shing, the Chief Investment Officer of iFAST Global Markets, told ET Net News Agency that a pullback after six consecutive weeks of gains for the index is normal, with expected support around 22,600. He anticipates that the US is unlikely to enforce a 50% tariff on the EU, as both sides would struggle to bear the consequences. However, he believes that the EU has limited countermeasures and that tariffs will likely end up around 20% to 30%, which would exert a negative influence on the market, though not for an extended period.
Wan Kong Shing added that if the index tests the 22,600 level, market participants will need to monitor developments in US Treasury yields and whether the Federal Reserve will adjust its monetary policy in response.
"BYD is expected to drop to around HKD 400; European sales support prices"
Reports suggest that BMW has recently lowered its future sales forecasts for pure electric models in China, including the new generation electric vehicle set to launch in 2026, while simultaneously raising projections for some petrol models. This has raised concerns about future demand for electric vehicles, leading to a pullback in BYD (01211) shares, which fell nearly 8% after hitting record highs, marking the first time in two weeks that it fell below the 10-day moving average. Wan Kong Shing noted that BYD's sales have been strong, particularly in Europe, where it has successfully surpassed Tesla. He views the current price drop as a good buying opportunity, expecting that the news will not significantly impact BYD's sales growth in Europe. He recommends considering buying in the range of HKD 400 to 403, with the potential for the stock to break new highs again, targeting the historical barrier of HKD 500.
"Wan Kong Shing: US tariffs on EU is likely to be moderate, short-term negative impact"
With the Hang Seng Index facing downward pressure, Trump's threat to impose a 50% tariff on the EU and his warning to companies like Apple and Samsung to relocate production to the US have added to market concerns. Following last Friday's US stock decline, Hong Kong stocks also experienced selling pressure, with the Hang Seng Index dropping over 200 points after opening nearly 100 points lower. Wan Kong Shing, the Chief Investment Officer of iFAST Global Markets, told ET Net News Agency that a pullback after six consecutive weeks of gains for the index is normal, with expected support around 22,600. He anticipates that the US is unlikely to enforce a 50% tariff on the EU, as both sides would struggle to bear the consequences. However, he believes that the EU has limited countermeasures and that tariffs will likely end up around 20% to 30%, which would exert a negative influence on the market, though not for an extended period.
Wan Kong Shing added that if the index tests the 22,600 level, market participants will need to monitor developments in US Treasury yields and whether the Federal Reserve will adjust its monetary policy in response.
"BYD is expected to drop to around HKD 400; European sales support prices"
Reports suggest that BMW has recently lowered its future sales forecasts for pure electric models in China, including the new generation electric vehicle set to launch in 2026, while simultaneously raising projections for some petrol models. This has raised concerns about future demand for electric vehicles, leading to a pullback in BYD (01211) shares, which fell nearly 8% after hitting record highs, marking the first time in two weeks that it fell below the 10-day moving average. Wan Kong Shing noted that BYD's sales have been strong, particularly in Europe, where it has successfully surpassed Tesla. He views the current price drop as a good buying opportunity, expecting that the news will not significantly impact BYD's sales growth in Europe. He recommends considering buying in the range of HKD 400 to 403, with the potential for the stock to break new highs again, targeting the historical barrier of HKD 500.