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Hong Kong stocks pare losses as gains at Trip.com and electric car makers overshadow e-commerce sell-off

Hong Kong Shares wiped out as a rally in travel goods and electric vehicle (EV) makers overshadowed sharp losses in Chinese technology stocks following a sell-off in Temu owner PDD Holdings and its e-commerce rivals.

The Hang Seng Index rose 0.4 percent to 17,874.67 on Tuesday, after losing almost 1 percent earlier. The Tech Index pared losses and closed unchanged, while the Shanghai Composite Index fell 0.6 percent.

Trip.com rose 9.3 percent to HK$367.40, while PetroChina gained 4.4 percent to HK$7.17, as traders bet on companies with market-leading positions for stable earnings. Both reported stronger interim results on Monday.

Electric car maker Xpeng rose 4.3 percent to HK$30.30 after its founder and CEO He Xiaopeng bought 2 million shares on Monday to increase his personal stake. Rival Li Auto rose 2.1 percent to HK$83.90 and Geely Auto gained 4.3 percent to HK$8.57.

Temu online marketplace e-commerce on smartphones and computers. Photo: Shutterstock
Local stocks opened earlier with heavy losses in e-commerce companies after PDD Holdings plunged 29 percent overnight in New York trading, wiping out $55 billion from its market value. Its CEO Chen Lei said the current growth trajectory was unsustainable. The sell-off also came after the U.S. retail giant Walmart sold its share acquired a stake in JD.com for $3.6 billion, ending an eight-year partnership.

Alibaba Group Holding shares fell 4 percent to HK$79.95 and e-commerce rival JD.com lost 4.3 percent to HK$101.30. Food delivery service Meituan lost 2.5 percent to HK$106.30 and video-sharing service provider Kuaishou lost 1.2 percent to HK$39.95.

“Investors are concerned about increased competition” among China's online retail platforms, said Kenny Wen, head of investment strategy at KGI Asia in Hong Kong. But the impact on the broader market or technology stocks is relatively limited, he added.

Amid challenges abroad, stock markets continued to rally, even as China's top market regulator urged state funds and private asset managers to increase their purchasing power to restore confidence in the market. Canada announced a 100 percent tariff on Chinese electric vehicles, joining the same move by the US and Europe.

Elsewhere, Japan's Nikkei 225 index rose 0.4 percent, Australia's S&P/ASX 200 fell 0.2 percent and South Korea's Kospi lost 0.3 percent.

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