China, HK stocks slip as auto sector drops amid heightened scrutiny

SHANGHAI: China and Hong Kong shares fell on Friday, weighed down by losses in the auto sector amid increased regulatory and consumer scrutiny.

• China’s blue-chip CSI300 Index dropped 0.6% by the lunch break, while the Shanghai Composite Index lost 0.3%. Hong Kong benchmark Hang Seng dipped 0.2%.

• Chinese automakers extended losses on Tuesday after Reuters reported that the country’s commerce ministry will meet with industry bodies and automakers, including BYD and Dongfeng Motor, to discuss the emerging trend of sales of “used cars” that were never driven.

• The Hang Seng Automobile Index fell more than 2%. BYD dropped nearly 4%, after tumbling 9% on Monday.

• The spotlight will be on the auto sector this week after price competition intensified among electric car makers and an industry executive warned the sector was in an unhealthy state.

• China’s industrial profits picked up pace in April, official data showed, signalling economic resilience in the face of trade tensions with the United States and lingering deflationary pressures at home.

• Meituan opened sharply down, but recouped most of the losses by midday after the leading delivery group reported a 46% rise in first-quarter net profit but warned the second quarter would likely be hit by increased competition in so-called “instant retail”.

• JD.com and Alibaba shed 3.2% and 0.5%, respectively.

• Healthcare stocks traded onshore and offshore jumped, with Sunshine Guojian Pharmaceutical Shanghai soaring 14.5% and CSPC Pharma gaining 4.5%.