HONG KONG: China and Hong Kong stocks fell on Monday, dragged down by weakness in tech and healthcare sectors, amid concerns over President Donald Trump’s new America First Investment Policy that could escalate tensions between the two biggest economies.
China’s blue-chip CSI300 Index fell 0.22% and the Shanghai Composite Index dipped 0.18% at close.
Hong Kong’s Hang Seng Index fell 0.58%, while the Hang Seng China Enterprises Index lost 0.55%.
Tech stocks led the decline in Hong Kong, with the Hang Seng Tech Index dropping 1.2%.
On Friday, Trump signed a memorandum that directed the Committee on Foreign Investment in the US to restrict Chinese investments in strategic areas, a White House official said.
The America First Investment Policy will also consider new or expanded restrictions on US-outbound investment to China in sensitive technologies.
“Investors should not be complacent about escalating US-China competition,” Jefferies analysts said after Trump’s move.
The emergence of DeepSeek could prompt the US to be vigilant about setting back China’s tech ambitions, they added.
In mainland A-shares, healthcare and 5G communication sectors underperformed, but were partly offset by a rally in property and liquor stocks.
Hong Kong-listed mainland properties stocks jumped 3.4%.
George Efstathopoulos, portfolio manager at Fidelity International, said they have been witnessing some green shoots in the property sector in the past few months, indicating that “the worst of the property deleveraging cycle is behind us”.
The smaller Shenzhen index was up 0.13%, the start-up board ChiNext Composite index was weaker by 0.67% and Shanghai’s tech-focused STAR50 index was up 0.48%?.
Certainly there are some headline risks from Trump’s focus on national security and resource nationalism, said Charu Chanana, chief investment strategist at Saxo Markets.
But the bigger driver for Chinese stocks will continue to be the stimulus measures expected from the annual National People’s Congress meeting starting next week, Chanana added.