FX.co ★ Hong Kong Shares Under Pressure

Hong Kong stocks saw a significant decline of 536 points or 2.5%, settling at 20,934 by midday on Wednesday. This drop ended a six-day winning streak as investors opted for profit-taking after the Hang Seng reached its highest level in two months earlier this week. The downturn in U.S. futures mirrored the overnight losses on Wall Street, notably affected by the decline in Nvidia shares following the U.S. government's announcement of new restrictions on the export of H20 AI chips to China and other regions. The Hang Seng Tech Index plummeted more than 4%, with Meituan experiencing a 7.0% decrease, while Tencent Holdings and Alibaba Group fell by 2.4% and 1.5%, respectively. Consumer, financial, and property sectors also saw losses amidst escalating concerns regarding China's economic growth, exacerbated by increasing trade tensions with the United States, despite unexpectedly strong first-quarter GDP growth driven by Beijing's stimulus measures. Nonetheless, positive activity data from March provided some mitigation against further declines. Electric vehicle manufacturers were hit hard, with Xpeng dropping 7.4%, followed by Geely Auto with a 4.9% decrease and Li Auto down 3.9%.