Hong Kong stocks slid to a four-month low on Monday as investor worries about US President Donald Trump’s reciprocal tariffs outweighed the positive impacts of an official report showing an expansion in China’s manufacturing industry and Beijing’s effort to recapitalise the banking sector.

The Hang Seng Index (HSI) fell 1.3%, the Hang Seng Tech Index (HSTECH) declined 2%.

Nio, SMIC, Xiaomi fell 4%; Kuaishou, BYD, Meituan fell 3%; Tencent, Alibaba, JD.com fell 2%.

“The bulls have left the building for now,” said Stephen Innes, managing director at SPI Asset Management in Bangkok. “The tariff rubric is still a black box, and that leaves traders in the dark. But one thing is crystal clear: countries running yawning trade deficits with the US are painted squarely in the crosshairs.”

Trump said he plans to impose his reciprocal tariffs on “all countries”, dousing speculation about a measured approach to the levies set to be unveiled on April 2. The Trump administration ramped up his trade war last week by slapping a 25 per cent tariff on all imports of cars not made in the US.

The president also said he would consider “secondary tariffs” on Russian oil and those who buy it if a ceasefire with Ukraine cannot be clinched. Russia is the world’s third-largest producer of the fuel.

The decline trimmed the monthly gain in Hong Kong stocks to 0.5 per cent. The market’s world-beating rally has cooled after Chinese tech stocks narrowed their valuation gap with US peers and economists warned of a moderation in China’s growth in coming quarters. The Hang Seng Index has risen 15 per cent this year.

A report by the National Bureau of Statistics showed that the purchasing managers Index of China’s manufacturing industry rose to 50.5 in March, indicating expansion for a second month.

“The manufacturing sector faces downside risk in the second quarter as the external demand weakens, driven by the tariffs and the economic slowdown in the US,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management in Hong Kong. “The big question is how much export growth will decline, and how quickly the fiscal spending will pick up to offset weaker exports.”