Strong performances by husband and wife Clayton and Lucinda Fredericks in the dressage on Saturday put Australia on top in the Olympic equestrian three-day event.
However, the French team were dealt a blow with a sudden withdrawal from the Games.
By the end of the second session, the Australian eventing team had amassed a total of 102.80 penalty points, followed by the US team with a total of 121.50 penalties. Germany finished in third place with 135.30 points.
Dressage, the first phase of eventing, will be followed by cross-country and show jumping next week.
"I thought it was very tough. My horse is 100 per cent fit and it is suitable for the course. The test is that I don't stuff it up and take a wrong line," Lucinda Fredericks told reporters, referring to the cross-country course.
"He did everything I asked. He was agile, wide-awake, fully switched on. I noticed his eagerness." Germany's Heinrich Romeike told reporters.
Some horses spooked slightly at members of the audience who used pieces of paper to fan themselves in the hot weather.
"Of course horses notice these things. They are flight animals by nature and had to look out for wolves," German teammate Frank Ostholt said.
France's Nicolas Touzaint announced his withdrawal from the Olympics after his horse, Galan de Sauvagere, was injured in a suspected accident in his stable in Hong Kong.
"The groom heard a bang in the stables during a thunderstorm yesterday morning. We didn't think it was serious, but when we were warming the horse up today we saw he was not well. He is injured on the hind leg," team leader Thierry Touzaint said at a news conference late on Saturday.
New Zealand's eventing team, which welcomed two-time Olympic gold medallist Mark Todd after his eight-year retirement, slipped to sixth place.
Three members out of each country's eventing team rode in the dressage on Saturday, and will be followed by the third and last session on Sunday.
*Reuters
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Sector: Technology
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Stage: Embarking on a Series A round to raise $5 million in the first quarter of 2019 with a 20 per cent stake
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- Suspend strict budget rules to allow member countries to step up defence spending
- Create new "instrument" providing €150 billion of loans to member countries for defence investment
- Use the existing EU budget to direct more funds towards defence-related investment
- Engage the bloc's European Investment Bank to drop limits on lending to defence firms
- Create a savings and investments union to help companies access capital