FX.co ★ Hong Kong Stocks Under Pressure to Begin New Month

Hong Kong's stock market experienced a significant decline, dropping by 507 points, or 2.2%, to reach 22,774 during early trading on the first day of June. This marks the second consecutive session of downturns, bringing the index to a three-week low. The market's performance was impacted by the resurgence of U.S.-China trade tensions. On the same day, Beijing accused the United States of "seriously violating" a previous trade truce established in May, promising to implement "strong and resolute measures" in retaliation. This statement followed President Trump's remarks on Friday, where he accused China of "totally violating" the agreement, particularly pointing out a decline in rare earth exports. Concurrently, U.S. futures saw a downturn after President Trump announced plans to increase steel tariffs to 50%, taking effect on Wednesday. Additionally, economic data from China contributed to the negative sentiment, as May's official Purchasing Managers' Index (PMI) indicated a continued contraction in manufacturing activity. All sectors experienced a decline exceeding 2%. Notable decreases were observed in companies such as Kuaishou Tech (-5.2%), China Resources Land (-4.3%), Meituan (-4.1%), and SMIC (-3.1%). Still, comments from U.S. Treasury Secretary Scott Bessent, assuring that the United States "will never default," helped to curb further market losses.