Headline shares of the Hong Kong market closed down on Monday, 05 November 2018, as investors cashed in on gains made on last Friday amid cautious again over the course of U.S.-China trade friction and cautious over the U.S. mid-term elections. At closing bell, the Hang Seng Index sank 551.96 points or 2.08% to 25,934.39. The Hang Seng China Enterprises Index decreased by 142.85 points or 1.34% to 10,544.92. The sub-index of the Hang Seng tracking the Commerce & Industry sector fell 2.3%, financial sector dropped 2%, properties sector slipped 2.4%, and Utilities sector shed 1.5%.

The market came under heavy selling pressure after remarks U.S. National Economic Council Director Larry Kudlow on CNBC. White House economic adviser Larry Kudlow denied a media report Friday that Donald Trump had asked senior officials of his administration to draft a possible deal with China on trade.

The U.S. mid-term elections are also in focus, with Trump's Republican Party this week defending its majority in the U.S. House of Representatives and the Senate. If the Republicans lose control of either the House or the Senate, markets could see more volatility on risk assets and a rising risk premium, strategists at Societe Generale wrote in a report. The political and economic agenda has driven the financial markets for the past two years -- so political gridlock and uncertainty will not come without pain.

All blue chips were lower except Sinopec (00386) and BankComm (03328), which rose 1.1% and 0.2% to HK$6.66 and HK$5.94 respectively. Tencent (00700) dipped 3.7% to HK$292.4. HSBC (00005) softened 1.4% to HK$65.5. HKEX (00388) declined 3% to HK$220.4. China Mobile (00941) fell 1.8% to HK$72.75. AIA (01299) shed 3.2% to HK$62.2. ICBC (01398) fell 2.2% to HK$5.44. China Life (02628) dipped 2.2% to HK$16.38. Ping An (02381) sank 1.3% to HK$78.

Shares of Apple's suppliers declined after Apple's share price plunged more than 6% after the company guided for disappointing earnings outlook. AAC Technologies (02018) dived 7.4% to HK$62.15, becoming the top blue-chip loser. Sunny Optical (02382) slipped 2.5% to HK$78.5.

Dongfeng Motor Group slipped 2% after the automaker on Friday said it agreed with Nissan Motor group to inject more capital into their existing joint venture Dongfeng Nissan Auto Finance.

China Resources Beer lost 3.8% after saying it agreed to buy Heineken Group's units in China and Hong Kong for about HK$2.35 billion ($300 million). The deal follows a licensing and equity collaboration agreement with Heineken group in August.