Hong Kong stocks fell on concerns tighter rules to stem Omicron infections in the city and mainland China will dent business and economic activity. Limiting losses, carmakers advanced on robust December sales. The Hang Seng Index slipped 0.5 per cent to 23,274.75 at the close of Monday’s session, following a 0.8 per cent gain in the final week of trading in 2021. It was only the third time in the past 10 years that the benchmark fell on the opening day of trading, after setbacks in 2019 and 2016. The Hang Seng Tech Index dropped 0.5 per cent, with Alibaba Group Holding and its health information unit retreating by at least 3.3 per cent. Markets in mainland China were shut for a public holiday. Shenzhou International plunged 7.8 per cent, leading index losers, after the Chinese garment manufacturer reported Covid-19 cases among its employees. Its factories in Ningbo, in eastern province of Zhejiang, were locked down after the firm reported 10 Covid-19 cases since Sunday, it said in a filing. “The developments of the Covid-19 pandemic remains as a big uncertainty,” Stanley Chik, research director at BrightSmart Securities, said in a note on Monday. Local stocks will remain volatile this year as global central banks tweak rate policies, he added. In Hong Kong, fears of an Omicron outbreak grew as three cases were confirmed Sunday, including a Cathay Pacific aircrew member who is thought to be the source after breaking isolation rules. Cathay slipped 0.2 per cent to HK$6.38. China’s star manager hopes for redemption as all 4 funds with US$16 billion in assets suffered losses in 2021 Xpeng Motors jumped 5.9 per cent, leading gains among carmakers. China’s top three electric vehicle start-ups maintained their strong sales momentum as deliveries surged in December to cap a banner year. Li Auto added 3.5 per cent. Xpeng and Li Auto posted record sales, while NIO ’s deliveries surpassed 10,000 units again in December. Caution remains after China reduced EV subsidies by 30 per cent on January 1 and prepares to remove them from next year. SenseTime jumped 41 per cent to HK$7.75, defying fears of sanctions surrounding its IPO late last month. Since its December 30 debut , the Chinese AI champion has soared 101 per cent from its IPO price of HK$3.85. Meanwhile, China Evergrande suspended its stock from trading, according to an exchange filing, without giving a reason. The troubled developer last week proposed a new repayment plan for investors holding some of its 200 billion yuan (US$31 billion) of high-yield investment products. Major Asian markets were mixed. South Korean equities rose 0.4 per cent, while Australian and Japanese stocks retreated by 0.4 to 0.9 per cent.