Hong Kong stocks suffer weekly loss after Biden widens investment ban on Chinese companies

Hang Seng Index completed a weekly loss, halting a rally in April and May, amid hardening US sanctions

The impact on the market would be limited, as investors have already digested the investment ban over the past year, analysts say

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A woman walks past a glass panel displaying stock prices outside a brokerage in Beijing. Photo: AP

Published: 10:26am, 4 Jun 2021Updated: 5:12pm, 4 Jun 2021

Hong Kong stocks fell to a weekly loss as the US hardened its sanctions on Chinese companies, signalling no let-up in tensions between the two largest economies over issues from trade to technology and human rights. Some robust data on the US economy also reignited concerns about Fed tapering.

The Hang Seng Index slipped 0.2 per cent to 28,918.10 on Friday, bringing the pullback in week to 0.7 per cent. President Joe Biden on Thursday issued an executive order banning US investors from buying more Chinese military-linked companies. The Shanghai Composite Index ended the week with a 0.3 per cent loss.

Haidilao International and Techtronic Industries were the biggest decliners, dropping 6.2 per cent and 1.9 per cent respectively in Friday trading. Geely Automobile was the biggest gainer with a 6.2 per cent jump.

Biden signed an executive order to blacklist Chinese companies that sell surveillance products used against religious minorities and dissidents. China had earlier criticised the move, saying it disrupted “normal market rules and order.”

The impact on the market would be largely limited, according to Hong Hao, managing director with Bocom International Holdings. The ban has already been well digested by markets over the past year, and the widening of the blacklist was not surprising.