Hong Kong stocks took a sharp dive on Tuesday as Sino-U.S. tensions weighed heavy on investor sentiment, while the Chinese markets had a mixed performance. The Hang Seng Index plummeted 0.6% while the blue-chip CSI300 Index remained unchanged.
Investors were concerned over the increasing tension between China and the U.S., which was highlighted with China’s warning to U.S. House Speaker Kevin McCarthy on Tuesday not to meet Taiwan President Tsai Ing-wen, who is currently on a visit to United States. However, there was a positive response to the U.S. President Joe Biden’s administration’s statement that it is still analyzing the reports that China had collected real-time data from a spy balloon flying over military sites earlier this year.
Technology stocks were among the worst hit, with Alibaba and Meituan slumping 3.2% and 4.1% respectively. Chinese electric vehicle firms were also among top losers in the market, as Tesla shares dropped in the United States, sending Nio and XPeng down 8.5% and 5.4% respectively.
Shares of the semiconductor company Semiconductor Manufacturing International Corp, however, rose 5.0% to a 14-month high and shares of state-owned enterprises and semiconductor firms supported the market sentiment. The most prominent growth was seen in the China CSI AI Index, which soared 3.6% to a 14-month high.
Tesla is an American electric vehicle and clean energy company based in Palo Alto, California. It designs, manufactures, and sells electric vehicles, batteries, and solar energy products. Founded in 2003 by entrepreneurs Martin Eberhard and Marc Tarpenning, Tesla focuses on producing products that are both environment-friendly and cost-effective. Tesla is considered a pioneer in the development of electric vehicles and has seen substantial success in the past decade.
Kevin McCarthy is an American politician serving as House Minority Leader in the United States House of Representatives since 2019. Hehas served in Congress since 2007. McCarthy is a Republican from California’s 23rd congressional district and was the House Majority Leader from 2014-2019. He supports fiscally conservative policies and has championed the rights of small businesses throughout his career.
