The Hang Seng index dropped 124 points, or 0.5%, closing at 23,258 on Wednesday. This decline followed modest gains in the previous session, as widespread losses in the financial, consumer, and technology sectors impacted the market. Investor sentiment deteriorated due to mounting concerns about a potential escalation in China-U.S. trade tensions once the current three-month hiatus concludes in July. The market's risk appetite was further subdued by an escalating price competition in China’s automotive sector, following BYD Co.'s announcement of new discounts on more than a dozen models. Contributing to the cautious atmosphere, investors awaited China's official PMI data set to be released in the coming days, with worries lingering over sluggish factory activity despite Beijing's stimulus measures.
Meanwhile, U.S. futures experienced a modest pullback after Tuesday's stock market rally on Wall Street, as investors prepared for Nvidia’s earnings report later in the day. Within the automotive sector, declines were observed with BYD Co. falling by 2.7%, Li Auto by 2.4%, and Geely Auto by 2.0%. Pop Mart Intl. experienced a sharp decline of 6.7%, marking its steepest one-day drop since early April.
