[ET Net News Agency, 02 June 2025] Tensions in the China-US trade war have reignited, with US President Trump accusing China of violating the tariff reduction agreement reached in Geneva last month, suggesting he may discuss the matter with President Xi Jinping. However, US Treasury Secretary Bessent expressed confidence that the latest friction would be resolved during a call between the US and Chinese leaders. Hong Kong stocks are feeling the pressure, compounded by the southern capital outflow restrictions during the Dragon Boat Festival holiday in Mainland China. Only five blue-chip stocks rose during the half-day session. The Hang Seng Index reported 22,778, down 511 points or 2.2%, falling below 23,000, having dipped over 600 points and breached the 50-day moving average (approximately 22,729) before recovering slightly. The main board recorded a turnover of nearly HKD 884 billion. The Hang Seng China Enterprises Index stood at 8,217, down 214 points or 2.5%. The Hang Seng Tech Index was at 5,044, down 125 points or 2.4%.
"Cheung Chi Wai: Hang Seng Index is likely to test lower levels"
This morning, the Hang Seng Index opened 246 points lower and the decline intensified, reaching a low of 22,679.92 points during the session. Cheung Chi Wai, a joint managing director at Prudential Brokerage Ltd, told ET Net News Agency that the index's short-term trend is expected to remain weak due to the renewed China-US trade war and the US raising tariffs on steel and aluminium imports, which has reignited market concerns about deteriorating China-US relations.
Cheung Chi Wai noted that the index has fallen below the pre-trade war level of 22,849 (the closing price on 3 April), reflecting a return to a more cautious market sentiment regarding the trade conflict. It is anticipated that the Hang Seng Index will continue to test lower levels, with support around 21,800 and resistance at 23,276.
"May sales figures for car manufacturers disappoint"
As several Mainland China car manufacturers released their sales figures for last month, the China Association of Automobile Manufacturers warned that a chaotic price war would exacerbate "malicious competition." The Ministry of Industry and Information Technology also indicated it would take measures to strengthen efforts against "inward" competition. Many car manufacturers saw their stock prices decline this morning, including BYD (01211), which fell for the sixth consecutive day, hitting a low of HKD 373.4, a ten-day low.
Cheung Chi Wai pointed out that the price cuts among Mainland China car manufacturers reflect poor sales conditions in the industry. Additionally, May's car sales figures showed only a slight month-on-month increase, indicating that sales may have peaked, prompting manufacturers to hastily reduce prices. As a result, Cheung Chi Wai expects continued downward pressure on car sector stock prices. It is believed that stability in stock prices will only return once the price war among manufacturers concludes and sales performance begins to stabilize.
"Cheung Chi Wai: Hang Seng Index is likely to test lower levels"
This morning, the Hang Seng Index opened 246 points lower and the decline intensified, reaching a low of 22,679.92 points during the session. Cheung Chi Wai, a joint managing director at Prudential Brokerage Ltd, told ET Net News Agency that the index's short-term trend is expected to remain weak due to the renewed China-US trade war and the US raising tariffs on steel and aluminium imports, which has reignited market concerns about deteriorating China-US relations.
Cheung Chi Wai noted that the index has fallen below the pre-trade war level of 22,849 (the closing price on 3 April), reflecting a return to a more cautious market sentiment regarding the trade conflict. It is anticipated that the Hang Seng Index will continue to test lower levels, with support around 21,800 and resistance at 23,276.
"May sales figures for car manufacturers disappoint"
As several Mainland China car manufacturers released their sales figures for last month, the China Association of Automobile Manufacturers warned that a chaotic price war would exacerbate "malicious competition." The Ministry of Industry and Information Technology also indicated it would take measures to strengthen efforts against "inward" competition. Many car manufacturers saw their stock prices decline this morning, including BYD (01211), which fell for the sixth consecutive day, hitting a low of HKD 373.4, a ten-day low.
Cheung Chi Wai pointed out that the price cuts among Mainland China car manufacturers reflect poor sales conditions in the industry. Additionally, May's car sales figures showed only a slight month-on-month increase, indicating that sales may have peaked, prompting manufacturers to hastily reduce prices. As a result, Cheung Chi Wai expects continued downward pressure on car sector stock prices. It is believed that stability in stock prices will only return once the price war among manufacturers concludes and sales performance begins to stabilize.