Hong Kong stocks dip, as gold hits record high on US auto tariffs

Hong Kong stocks retreated 0.9 percent by noon on Friday, while gold hit a record high on US auto tariffs

The benchmark Hang Seng Index stood at 23,368 points as of midday, 210 points or 0.89 percent lower than the previous close.

The main board turnover was HK$131.72 billion.

The indicator once hit as high as 23,775 in the morning session.

The Hang Seng Tech Index dropped 1.68 percent, or 93 points, to 5,495 points.

The Hang Seng China Enterprises Index slid 1.1 percent, or 95 points, to 8,582 points.

Xiaomi (1810), the most traded stock in the morning in Hong Kong, slid 3.38 percent to HK$49.95, a monthly low for the smartphone and electric vehicle maker.

This comes as the United States moved ahead with a 25 percent tariff on auto imports – due to take effect on April 3 – drawing fierce criticism from politicians and industry executives across the globe, alongside a warning from global car makers that price hikes were likely on the way.

In mainland China, the Shanghai Composite Index dipped 0.71 percent, or 24 points, to 3,349 points, while the Shenzhen Component Index lost 0.53 percent, or 56 points, to 10,611 points.

But other Asian markets recorded a heavier selloff. 

Japan's Nikkei 225 fell 2.3 percent led by a sharp drop in Toyota and Honda stocks. South Korea's Kospi index touched a two-week low and was last down over 1.8 percent. The auto industry is a pillar of both countries' economies.

"US tariffs on auto imports do not come as a huge surprise, having been flagged for some time," said Frederic Neumann, chief Asia economist at HSBC.

"To some extent, producers can shift supply chains and production locations to mitigate these effects. At the same, they may also be able to pass some of the price increases to US consumers, given that tariffs affect nearly all producers."

The focus is now on reciprocal tariffs the US is due to announce on April 2. Trump indicated the measures may not be the like-for-like levies he has been pledging to impose.

In commodities, gold prices scaled a record peak on Friday as the threat of trade wars drives a rush toward the safe-haven metal. 

The spot price of gold was last up 0.57 percent at US$3,074 (HK$23,977) per ounce.

Gold is up more than 17 percent in the first quarter of the year, heading for its best quarterly performance since 1986.

STAFF REPORTER AND REUTERS