Hang Seng Under Pressure at Finish

The Hang Seng Index rose 117 points, or 0.6%, to close at 25,893 on Friday, recovering from a brief pullback in the previous session as Hong Kong equities advanced on signs that persistent industrial deflation in China may be easing. Sentiment improved after data indicated a turnaround in factory-gate pricing pressures, with investors viewing the shift as a potential inflection point for corporate earnings and broader economic growth. However, the fragile US-Iran ceasefire came under renewed strain as both sides traded accusations over breaches of commitments, including issues around the Strait of Hormuz, while Israeli strikes in Lebanon further heightened geopolitical tensions ahead of upcoming talks in Pakistan. Most sectors advanced, led by financial and technology stocks. Notable gainers included Semiconductor Manufacturing (4.6%), Guotai Junan International (27.7%), Deepexi Technology (48.8%), Shenzhen Xunce Technology (7.6%), and Geely Automobile Holdings (2.5%).

The Hang Seng Index climbed 269 points, or 1.1%, to 26,032 on Friday, bouncing after a brief pullback in the previous session as renewed Middle East de-escalation sentiment following reports that Israel signaled openness to negotiations with Lebanon helped restore risk appetite. The rebound was driven by broad-based buying across major sectors, with technology and financial stocks leading gains as investors rotated back into risk assets. However, sentiment remained fragile amid concerns over the Strait of Hormuz and wider regional tensions, which continued to influence oil prices and global risk appetite. Traders stayed cautious, warning that any escalation could quickly reverse recent equity gains and tighten financial conditions across Asia. Notable movers included Tencent Holdings (0.3%), H World Group (+0.2%), Shenzhen Xunlei Technology (+9.8%), Semiconductor Manufacturing International Corporation (+3.9%), and Xiaomi Corporation (+1.2%).

The Hang Seng Index fell about 0.5% to close at 25,752 on Thursday, retreating from the previous session’s rally as Asian markets turned cautious. Sentiment was weighed down by fragility and tensions in the Middle East, which continue to drive volatility in oil prices and raise concerns that inflationary pressures could persist longer than expected. Iran’s move to restrict shipping and impose tolls in the Strait of Hormuz, an essential global oil route has further unsettled markets, posing risks to global economic growth and equity performance. On the data front, China’s March CPI and PPI are due on Friday, with inflation expected to ease to 1.2% from 1.3% and PPI to rebound 0.4% after a 0.9% drop, with the data key for Hong Kong stocks as it signals mainland demand and pricing power shaping earnings prospect for China-linked firms. Only the technology, energy minerals, and utilities sectors posted gains. Notable laggards included Xiaomi (-4.3%), Sinotruk (-2.8%), and Kuaishou (-3.6%).