Hang Seng Index Dropped 2% After U.S. Expanded Chinese Military Entities L

Li Chen
07 Jan, 2025
Hong Kong

Stocks in China and Hong Kong traded down in active trading amid rising trade tensions with the U.S. and ongoing weakness in the property market.

The Hang Seng index dropped 2%, and the mainland-focused CSI 300 index decreased 0.2% as investors reacted to the latest inclusion of key Chinese tech companies as "military entities" by the U.S. 

CATL, Cosco Shipping, and Tencent Holdings were included in the supplementary list among dozens of Chinese military companies in the Federal Register released by the Department of Defense on January 7. 

The inclusion in the register does not impose a trade ban with the companies but acts as a warning to U.S. investors from investing in these publicly traded companies. 

 

China Stock Movers 

The Hang Seng index dropped 2.2% to 19,257.84, and the mainland-focused CSI 300 index fell 0.2% to 3,759.95. 

The yield on 10-year Chinese government notes hovered near a record low of 1.6% amid persistent deflation worries and a lack of improvement in the property market outside of three key urban regions—Beijing, Shanghai, and Shenzhen. 

CATL dropped 3.4% to ¥247.99, Cosco Shipping Holdings dropped 4% to HK $12.18, and Tencent Holdings plunged 7.3% to HK $379.40. 

Other technology stocks declined on the worries that the U.S. may expand the banned list of companies in the sector for future investments. 

JD.com dropped 1.5% to HK $133.70, Meituan fell 2.4% to HK $147.10, Alibaba Group Holding decreased 1.3% to HK $81.05. and Baidu declined 0.9% to HK $80.0. 

Property developers continued the decline as activities in top cities outside three key urban regions are expected to remain weak in 2025. 

China Vanke Ltd. decreased 1.6% to HK $4.95, China Resources Land fell 0.7% to HK $22.0, Longfor Group dropped 0.9% to HK $9.84, and Henderson Land Development declined 1.7% to HK $22.85.