The Hong Kong stocks traded in a narrow range on Tuesday. The Hang Seng Index (HSI) rose 0.3%, and the Hang Seng Tech Index (HSTECH) dropped 0.4%.
Kuaishou fell 9%; Bilibili fell 4%; Nio fell 3%; Alibaba fell 2%; Tencent fell 0.3%; Fosun Intl up 13%; Xiaomi up 2%.
Investors took the tariff-extension news in their stride, as the outcome was in line with expectations. US President Donald Trump on Monday signed an executive order extending the tariff truce with China by 90 days until November 10, while China also made a similar statement.
The extension of the trade tariff deadline did not come as a surprise to the financial markets as investors had already assumed the deadline would be extended, said Zhang Zhiwei, the chief economist at Pinpoint Asset Management in Hong Kong.
“The trade negotiation is an ongoing process that will take months,” he said. “Hiking the tariffs now will not achieve anything. It will only push China to retaliate as before.”
Market sentiment will be tested, as some of the Hang Seng Index constituents release first-half earnings this week. Tencent, the second-most valuable stock in the benchmark, may post a 7.8 per cent profit increase from a year ago in the second quarter, according to analysts’ estimates tracked by Bloomberg. Second-quarter profit at JD.com probably fell 59 per cent, while NetEase is likely to report a 28 per cent jump in profit, the data showed.
China’s statistics bureau will disclose the July economic data on Friday, offering fresh clues on how the world’s second-largest economy fared after first-half growth topped estimates. Retail sales growth and industrial output probably slowed down in July from a month ago, Bloomberg data showed. The US inflation data for July is due tonight, which could shape the monetary policy outlook.