Hong Kong stocks post biggest loss in three weeks as Biden seen amending China sanctions, adding more targets

Benchmarks in Hong Kong and China dropped as rally lost momentum amid headwinds, while caution prevailed before US non-farm payrolls report

Amendments to US sanctions seen as giving teeth to enforcement after Xiaomi, Luokung challenged order and won in US courts

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An investor looks at an electronic board showing stock information at a brokerage house in Shanghai. Photo: Reuters

Published: 11:28am, 3 Jun 2021Updated: 4:50pm, 3 Jun 2021

Hong Kong stocks fell by the most in three weeks, stalling a two-month rally amid a report saying President Joe Biden was preparing to amend US sanctions on Chinese companies with ties to the military, including the addition of new targets.

The Hang Seng Index dropped 1.1 per cent to 28,996.03 on Thursday, retreating from a three-month high this week following an almost 3 per cent jump over the past two months. China’s Shanghai Composite Index ended trading with a 0.4 per cent decline.

CNOOC, one of the sanctioned names, slumped 2.6 per cent while Tencent Holdings lost 2.1 per cent. CK Infrastructure and Geely Automobile were also among big index losers, falling at least 2 per cent.

Biden plans to amend a Trump executive order that banned investments in Chinese technology and surveillance companies allegedly owned or controlled by the Chinese military, according to a Bloomberg report.

The move could add more teeth to enforcement by shifting the action from Defence to the Treasury department, as well as potentially target more companies, it added. Xiaomi Corp and Luokung had earlier challenged the order and won in US courts.

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