Hong Kong stocks closed lower on Monday following six weeks of rally that drove the benchmark index to a two-month high, as investors await fresh market catalysts following signs of China’s economic and corporate earnings setbacks amid a tariff war.

The Hang Seng Index fell 1.4%, while the Hang Seng Tech Index dropped 1.7%.

BYD led Chinese vehicle stocks lower in Hong Kong on Monday, as investors digested the auto giant’s sweeping price cuts of as much as 34% late last week.

Shares of China’s No. 1 selling car brand tumbled as much as 8.6%, while peers Leapmotor, Geely Automobile, Great Wall Motor, Brilliance China, XPeng, Li Auto, Xiaomi, and NIO dropped between 3% to 9.5% amid investor concern about intensifying competition in the sector.

Meituan shares sank 5.5%. China's State Administration for Market Regulation has issued draftguidelines on the fees online platforms charge third-party merchants, akey revenue stream for companies like JD. com, Meituan, and PDDHoldings Inc. The regulator stated that platform operators should chargereasonable fees and consider factors such as the operational status ofthe merchants they work with.

In terms of other star stocks, CATL fell 3%; JD.com, Alibaba, and Tencent fell 2%.

China’s official PMI manufacturing index probably rose to 49.5 in May from 49 in April, a government report on May 31 may show, remaining in contraction mode. Activity reports for April were mixed, with industrial production beating market expectations, while gains in retail sales and fixed asset investment disappointed.

“Sequential growth slowed across-the-board from March to April, indicating heightened US tariffs taking a toll on the Chinese economy,” Goldman Sachs said in a report on Sunday.

So far, 33 of Hang Seng Index members have disclosed their first-quarter earnings, averaging a 3 per cent year-on-year growth, according to Bloomberg data, trailing consensus estimates by 1.1%. Alibaba, the Post owner, fell short of expectations, while Baidu’s advertising business outlook was bleak.