Hong Kong stocks closed lower on Wednesday, tracking weakness on Wall Street as its recent rally lost momentum, while gold and silver extended their pullback from record highs. Investors also weighed whether US-China tensions could ease after US President Donald Trump offered mixed signals on a potential meeting with his Chinese counterpart Xi Jinping.

The Hang Seng Index fell 0.9%, while the Hang Seng Tech Index dropped 1.4%.

In terms of star stocks, NetEase fell 4%; Alibaba, Kuaishou, XPeng fell 2%; Tencent, Li Auto fell 1%; Xiaomi fell 0.3%; Pop Mart rose 2%.

That follows a retreat in the US overnight, as the S&P 500 Index halted a recent rally while the Nasdaq Composite Index lost 0.2 per cent. Gold traded near US$4,100 per ounce after dropping as much as 6.1 per cent from the high recorded on Monday, while silver lost 7.9 per cent to US$48.54 over the same period.

Sentiment was also tempered after Trump said he expected to reach a “good deal” with Xi on trade, but acknowledged that a potential meeting later this month at the Asia-Pacific Economic Cooperation summit in South Korea might not happen.

“Traders have seen this act before – brinkmanship dressed as diplomacy, uncertainty masquerading as intent,” said Stephen Innes, a managing partner at SPI Asset Management. “The market doesn’t tank on that - it just hesitates, trying to read the bluff.”