[ET Net News Agency, 13 October 2025] Rising China-US trade tensions have rattled global
markets, with US President Trump announcing further tariffs on Chinese goods. In response,
China's Ministry of Commerce clarified that rare earth controls do not equate to an export
ban and expects only limited impact. US Vice President Vance said the US is willing to
engage in rational talks with China. US equity futures rebounded during the midday close
in Hong Kong, with the Dow Jones up 385 points. However, both the Hong Kong and Mainland
China markets posted losses at midday, with only Hang Seng Bank (00011) holding steady
among HSI constituents. The Hang Seng Index closed the morning at 25,374, down 916 points
or 3.5%, on main board turnover exceeding HKD 281.8 billion. The Hang Seng China
Enterprises Index dropped 325 points or 3.5% to 9,032, while the Hang Seng Tech Index fell
284 points or 4.5% to 5,975.

"Wan Kong Shing: Weak southbound flows; HSI likely to test 25,000 support"

Last week, China announced export controls on rare earths and other critical minerals,
prompting the US to retaliate with 100% tariffs on Chinese imports. US equities,
especially tech stocks, fell sharply on Friday, with the Nasdaq down over 3.5%. Hong Kong
futures at one point dropped around 1,500 points, but both sides have since softened their
stance: China stressed the controls are not a ban, and US President Trump said he has not
cancelled his meeting with President Xi at the upcoming APEC summit. The HSI opened down
656 points this morning, narrowing losses versus Friday's night session, but losses
deepened by midday, with the HSI down over 900 points.
Wan Kong Shing, the Chief Investment Officer of iFAST Global Markets, told ET Net News
that while there is still some market optimism for a potential China-US meeting,
volatility will remain high in the interim. He noted that southbound investor flows remain
cautious, limiting the HSI's rebound potential. In the short term, the index is likely to
test support at the 100-day moving average around 25,000, which should be relatively firm,
with initial resistance at the 20-day moving average near 26,500.

"China's rare earth exports crucial to US; strengthening China's hand in talks"

Though China has stated its rare earth controls are not an outright ban, Wan Kong Shing
emphasised that rare earths are critical for US AI hardware. Media reports suggest India
and Pakistan have recently stopped reselling rare earths to the US, increasing China's
importance as a supplier. If China continues to tighten controls, the US will be forced to
make concessions. He also noted that the US had earlier announced additional port fees on
Chinese vessels, soon to take effect, which could be a bargaining chip for China. Should
the US agree to remove these fees, it could help facilitate negotiations.
Wan also pointed out that China has reportedly stepped up inspections of imported chips,
reflecting growing confidence in setting Mainland China chip standards and in the
practical use of domestic chips, further strengthening China's position in negotiations.
He expects leading chipmakers such as SMIC (00981) and Hua Hong Semi (01347) to remain
resilient.

"Bitcoin supported above USD 100,000; weaker US treasuries to boost gold"

The China-US standoff has impacted cryptocurrency markets, with Bitcoin tumbling from
USD 120,000 to as low as 102,000, and now hovering around 110,000. Wan expects the price
to consolidate between 107,000 and 120,000 in the near term. He believes that amid market
volatility, capital will continue to favour gold. With renewed tariff tensions, safe-haven
demand has pushed New York gold futures back above USD 4,000, nearing the 4,080 high.
Wan remains positive on gold in the medium term, targeting USD 5,000 next year. However,
he stressed that even if safe-haven demand lifts prices, a short-term correction before
breaking USD 4,200 would be healthier for the subsequent rally, ideally, a pullback to
around USD 3,800-3,900 would provide a better entry point. He observed that global
confidence in US Treasuries is weakening, with increased US-based buying of gold,
suggesting both hedging and speculative flows will support prices. An initial short-term
target is set at USD 4,200.