Hong Kong stocks fall as US debt ceiling talks, spat between Beijing and Washington weigh on sentiment

Shares initially struggled to find direction as traders await developments in the debt ceiling talks amid rising tensions between Beijing and Washington

Pharmaceutical stocks surged as Chinese health authorities said more vaccines are on the way to curb Covid-19 waves

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Speaker of the House Kevin McCarthy takes a question from the news media as debt ceiling negotiations continue on Capitol Hill. Photo: EPA-EFE

Published: 11:04am, 23 May 2023Updated: 4:52pm, 23 May 2023

Stocks in Hong Kong fell on Tuesday as the protracted US debt ceiling negotiations and rising tensions between Beijing and Washington continued to weigh on sentiment. Pharmaceutical stocks surged as Chinese health authorities said more vaccines are on the way to curb Covid-19 waves.

The Hang Seng Index dropped 1.3 per cent to 19,431.25 at the close of trading, having flipped from an early morning gain of as much as 0.5 per cent. The Tech Index dropped 1.3 per cent while the Shanghai Composite Index lost 1.5 per cent.

E-commerce giants Alibaba and JD.com slipped 0.6 per cent and 1.8 per cent respectively, while video games company NetEase crashed 4 per cent to HK$134.30. China’s largest chip maker, Semiconductor Manufacturing International Corporation, plummeted 6.5 per cent to HK$19.68 while property developer Country Garden fell 3.8 per cent to HK$1.54.

Limiting losses, drug maker Hansoh Pharmaceutical jumped 4.7 per cent to HK$13.76 and Wuxi Biologics gained 0.9 per cent to HK$44.95, after health authorities in China said they are preparing to roll out new vaccines to battle Omicron subvariants.

US President Joe Biden and House Speaker Kevin McCarthy said they had a “productive” discussion about the debt ceiling though no deal has been reached yet. Treasury Secretary Janet Yellen said the country could find itself unable to pay its bills as soon as June 1.