US President Donald Trump says he will unveil unilateral tariff rates within two weeks

Hong Kong stocks fell on Thursday, following declines in the US, as investors contended with new trade threats from Washington and uncertainty over trends in interest rates.

The Hang Seng Index dropped 0.8 per cent to 24,176.63 at 9.55am local time, wiping out Wednesday's gains following a preliminary US-China trade agreement. The Hang Seng Tech Index dropped 1.5 per cent. On the mainland, the CSI 300 Index lost 0.2 per cent and the Shanghai Composite Index retreated 0.1 per cent.

Technology stocks weighed on Hong Kong's benchmark. Kuaishou Technology, owner of a short-video platform, lost 3.2 per cent to HK$60.20, e-commerce giant Alibaba Group Holding fell 2.8 per cent to HK$115.10 and electric-vehicle maker BYD retreated 2.3 per cent to HK$137.60. Alibaba owns the Post.

Horizon Robotics, which makes artificial intelligence chips for self-driving cars, sank 4.7 per cent to HK$7.09 after it said it would sell 681 million shares at HK$6.93 a share.

On the upside, Sino Biopharmaceutical surged 13.2 per cent to HK$5.41 and Sunny Optical Technology Group, which makes camera modules for mobile phones, gained 1.8 per cent to HK$66.60. Wuxi Biologics rose 2.6 per cent to HK$27.35.

On Wednesday, US President Donald Trump said he would unveil unilateral tariff rates within two weeks. The S&P 500 index dropped 0.3 per cent and the Nasdaq 100 fell 0.5 per cent overnight. The comment came after the US struck a preliminary trade deal with China; the framework agreement awaits approval from Beijing and Washington.

The US' Consumer Price Index for May showed that inflation rose by just 0.1 per cent from a month earlier, below economists' expectations of 0.2 per cent. While softer inflation increased hopes for potential US Federal Reserve rate cuts later in the year, it also signalled a possible slowdown in economic momentum, which tempered investor enthusiasm.

Investors are no longer expecting a Fed rate cut next week, with a 99.8 per cent probability of maintaining the current level, according to data compiled by CME Group based on Fed fund futures contracts. Traders boosted their bets on a September cut to around 75 per cent.

Elsewhere in the Asia-Pacific region, Japan's Nikkei 225 dropped 0.8 per cent, South Korea's Kospi added 0.4 per cent and Australia's S&P/ASX 200 strengthened 0.1 per cent.

Source: Bloomberg