Hong Kong stocks fell for a third day amid deepening concern over the outlook for China’s technology sector. A government report showing slower inflation in China, a favourable sign for policy easing, failed to shore up sentiment. The Hang Seng Index dropped 0.6 per cent to 19,925.74 on Thursday. The benchmark index closed below the 20,000-mark for the first time since February 28. The Tech Index lost 1.5 per cent and the Shanghai Composite Index slipped 0.2 per cent. Alibaba Group retreated 1.5 per cent to HK$84.50, and Tencent lost 2.7 per cent to HK$340.20. Meituan tumbled 1.9 per cent to HK$129.40, and chip maker SMIC fell 0.1 per cent to HK$16.48. Tempering losses, e-commerce operator JD.com added 0.6 per cent to HK$179.30 before its earnings while car maker BYD gained 0.7 per cent to HK$219. The Netherlands is proposing new rules that would curb exports of so-called immersion DUV lithography machines, which are critical to producing the world’s most advanced chips. The rules are expected before the summer, the minister of foreign trade wrote in a letter to lawmakers on Wednesday. “The geopolitical factor could be a focus this year, given that the US will continue to exert its influence over other nations,” said Dang Chongyu, an analyst at Sealand Securities. “Such impact on Hong Kong stocks may be intensified going forward.” The Dutch proposal follows a similar move imposed by the US last year and is largely seen as the result of discussions between the US and its allies to contain China’s access to the most advanced technology. The US last week added 28 more Chinese companies to its export blacklist, prompting Beijing to make a stronger push toward self-sufficiency. ‘Puzzling’ as China’s consumer inflation eases on weak demand Separately, consumer prices in China rose 1 per cent from a year earlier in February, the slowest in a year, the statistics bureau reported on Thursday . Producer prices dropped 1.4 per cent, versus a 0.8 per cent decline in January. Diversified group Swire Pacific tumbled 3 per cent to HK$63.40 after saying underlying profits fell 10 per cent in 2022 on losses incurred by its Cathay Pacific unit and shrinking profit contribution from its property arm. Three companies started trading on Thursday. Logory Logistics Technology dropped 2.1 per cent to HK$2.84 in Hong Kong. Mloptic, a maker of optical components, surged 175 per cent to 192 yuan in Shanghai. Hangzhou Huasu Technology, which makes battery-management products, gained 50 per cent to 84.77 yuan in Shenzhen. Other major Asian markets were mixed. Japan’s Nikkei 225 climbed 0.6 per cent, while South Korea’s Kospi retreated 0.5 per cent and Australia’s S&P/ASX 200 added 0.1 per cent.