Hong Kong stocks fell on Tuesday as tensions between the U.S. and China rose in the wake of a failed meeting between House Speaker Kevin McCarthy and Taiwan President Tsai Ing-wen. Meanwhile, mainland Chinese stocks were largely unaffected as the CSI 300 picked up 0.3% and the Shanghai Composite rose 0.5%.
Leading the losses in Hong Kong was the benchmark Hang Seng Index, which fell 0.7%. Hong Kong-listed tech stocks were particularly hard hit, with Alibaba and Meituan both dropping over 3%. Chinese electric-vehicle makers traded in Hong Kong were also down sharply in sympathy with Tesla’s slowdown in the U.S. Nio and XPeng saw losses of 7.6% and 6.5%, respectively.
China’s blue chips, on the other hand, saw sustained strength in AI and state-owned enterprises. The CSI AI Index jumped 2.5%, reaching a 14-month high, while China Railway Group and China Communications Construction rose 10% and 9.3%, respectively. Semiconductor Manufacturing International Corp (SMIC) also rallied 3.8% to reach its highest point in a year.
Alibaba is a top Chinese technology giant and one of the world’s largest e-commerce companies. Founded by Jack Ma in 1999, it operates an extensive range of services, including mobile and electronic payment, cloud computing, and artificial intelligence.
Tsai Ing-wen is the current President of Taiwan, the first woman to serve in the role. She holds a law degree from the London School of Economics and a Ph.D. in law from Cornell Law School, and prior to her presidency, she served as the party chair of the Democratic Progressive Party. A strong advocate of Taiwanese independence, she has long championed deepening Taiwan-US relations and as president has overseen closer economic and military ties with the United States.