Hong Kong, China stocks slide as doubts grow over US-China tariff deal

Hong Kong and mainland China stocks dropped on Tuesday, weighed down by growing doubts over whether Beijing and Washington could reach a tariff deal when the world’s two largest economies meet later this month amid revived trade tensions.

Hong Kong's benchmark Hang Seng Index fell 448 points, or 1.73 percent, to close at 25,441, with turnover shrinking 18 percent to HK$398.9 billion.

The Hang Seng Tech Index slid 3.62 percent to 5,923, while the China Enterprises Index declined 143 points, or 1.55 percent, to 9,079.

Among blue chips, China Merchants Bank (3968) rose 4.7 percent to HK$48.16, the day’s top gainer, while SMIC (0981) fell 8.48 percent to HK$73.35, making it the worst performer on the index.

Markets had earlier joined the rebound from Monday's cash session after US Treasury Secretary Scott Bessent said President Donald Trump remains on track to meet Chinese leader Xi Jinping in South Korea in late October. But he added fuel to the fire in an interview in the Financial Times where he accused Beijing of trying to damage the global economy.

In the mainland, the Shanghai Composite Index lost 24 points, or 0.62 percent, to 3,865, while the Shenzhen Component Index dropped 336 points, or 2.54 percent, to 12,895.

Citi analysts said they do not expect an escalation of trade tensions between Beijing and Washington.

"The reason is not so much the reassuring President Trump tweet over the weekend, but the fact that China may be the only country with bargaining power, where the U.S. may have to be more flexible in its negotiation stance," Citi wrote.

STAFF REPORTER and REUTERS