Sino-U.S. Trade Tensions Rattle Asian Markets: Technology Stocks Lead Plunge

Chinese and Hong Kong stocks fell sharply on Tuesday due to intensified Sino-U.S. trade tensions. Defensive sectors witnessed gains amid investor concerns over prolonged conflicts. The technology sector was notably affected due to potential security issues and new tariffs. Market observers brace for continued volatility ahead of crucial diplomatic meetings.

On Tuesday, Chinese and Hong Kong stock markets faced significant declines as escalating Sino-U.S. trade tensions drove investors to profit-taking and safer investments. This triggered a wave of selling, notably impacting the technology sector.

The Shanghai Composite Index decreased by 0.6%, ending at 3,865.23, reversing an earlier rise in the session. Meanwhile, the blue-chip CSI300 Index fell by 1.2%. In Hong Kong, the Hang Seng Index fell by 1.7% to 25,441.35, extending its losing streak to seven sessions, a record since January 2024.

Beijing's imposition of sanctions on U.S.-affiliated South Korean shipbuilders and the Dutch government's control over a Chinese-owned chipmaker, Nexperia, exacerbated the situation, fueling technology-security concerns. In contrast, insurance, liquor, and banking stocks outperformed, giving some hope of stability until a scheduled meeting between Presidents Trump and Xi Jinping in late October.

(With inputs from agencies.)