Hong Kong stocks retreat to 4-week low as Trump’s reciprocal tariffs draw near

Investor jitters over tariffs set to be unveiled on April 2 outweigh a positive China manufacturing report

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People walk past Exchange Square in Central, home of bourse operator Hong Kong Exchanges and Clearing, on March 28, 2025. Photo: Matthew Miller

Published: 10:26am, 31 Mar 2025Updated: 4:36pm, 31 Mar 2025

Hong Kong stocks slid to a four-week low on Monday as investor worries about US President Donald Trump’s reciprocal tariffs outweighed the positive impacts of an official report showing an expansion in China’s manufacturing industry and Beijing’s effort to recapitalise the banking sector.

The Hang Seng Index fell 1.3 per cent to 23,119.58 at the close, a level not seen since March 4. The Hang Seng Tech Index dropped 2 per cent. On the mainland, the CSI 300 Index sank 0.7 per cent, and the Shanghai Composite Index slid 0.5 per cent.

Chinese sportswear maker Li Ning tumbled 7.2 per cent to HK$15.92, and property developer Longfor Group Holdings lost 5.1 per cent to HK$9.81 after posting an almost 40 per cent annual decline in core profit. Alibaba Group Holding fell 2.3 per cent to HK$128, while Tencent Holdings slid 2.5 per cent to HK$497. CK Hutchison Holdings, the conglomerate controlled by the Li Ka-shing family, sank 3.1 per cent to HK$43.75 after the company said it was evaluating a plan to spin off its global telecoms business. Bucking the sell-off, China Construction Bank and Bank of China advanced.

“The bulls have left the building for now,” said Stephen Innes, managing director at SPI Asset Management in Bangkok. “The tariff rubric is still a black box, and that leaves traders in the dark. But one thing is crystal clear: countries running yawning trade deficits with the US are painted squarely in the crosshairs.”

Other major markets around Asia mostly tumbled more severely than Hong Kong’s. Japan’s Nikkei 225 plunged 4.1 per cent, while South Korea’s Kospi retreated 3 per cent and Australia’s S&P/ASX 200 lost 1.7 per cent. Investors flocked to haven trade, sending spot gold prices to a record of US$3,121.40 per ounce.

Trump said he plans to impose his reciprocal tariffs on “all countries”, dousing speculation about a measured approach to the levies set to be unveiled on April 2. The Trump administration ramped up his trade war last week by slapping a 25 per cent tariff on all imports of cars not made in the US.

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