Hang Seng Under Pressure at Finish

The Hang Seng lost 385 points or 1.4% to close at 26,381 on Thursday, swinging from strength in the prior session amid a notable drop in U.S. futures after Nvidia's earnings failed to impress markets, and geopolitical tensions between the U.S. and Iran persisted. Meanwhile, mainland stocks were subdued, with investors cautious ahead of China’s annual legislative meeting in March. Still, losses were limited by a steady rise in spending across the mainland during the Lunar holiday last week. Meanwhile, Shanghai city reportedly eased further home purchase rules for non-residents. Tech and consumer stocks each slid over 2%, while declines in financials and property were moderate ahead of Chinese PMI data for February, due next week. Galaxy Ent. dipped 3.9% despite stronger 2025 profits, while Kuaishou Tech (-3.8%), Pop Mart Intl. (-3.4%), and Meituan (-2.6%) also lagged. In contrast, HKEX rose 0.5% after reporting higher Q4 profit and revenue on robust listings and trading activity.

Hong Kong shares fell 168 points, or 0.6%, to 26,602 in Thursday morning trade, reversing the prior day’s gains as mainland stocks retreated and traders cautiously awaited February PMI data, due next week. U.S. futures also slipped following Wall Street’s strength overnight, with sentiment dampened by IMF warnings that the U.S. current account deficit remains excessive, echoing concerns from the Trump administration. Still, losses were limited after the city’s 2026/27 budget projected an earlier-than-expected operating surplus following three years of deficits. Meanwhile, inflation in Hong Kong eased to 1.1% in January, pointing to a four-month low and slightly below forecasts. The tech index drove the decline, with Nvidia’s strong results failing to lift sentiment. Meanwhile, consumer stocks weakened on worries about a post-holiday slowdown after Lunar New Year spending. Early laggards included KE Holdings (-4.9%), Galaxy Ent. (-3.7%), Trip.com (-2.8%), and Kuaishou Tech (-2.7%).

The Hang Seng Index rose 175 points, or 0.7%, to close at 26,766 on Wednesday, rebounding from the prior session’s weakness. Sentiment improved after the city’s 2026/27 budget projected an earlier-than-expected operating surplus following three years of deficits. Financial Secretary Paul Chan Mo also unveiled measures to bolster Hong Kong’s global financial role and support innovation and tech development. Meanwhile, Q4 GDP growth in the city was confirmed at 3.8%, the fastest in two years, lifting full-year growth to 3.5% from 2.6% in 2024. Further gains in mainland stocks added to the momentum, as the Trump administration pushed plans for a global metals trading zone, boosting rare earth and metal shares. Financials led the advance, and consumer stocks edged higher, though property and tech weakness capped gains. Haidilao surged 6% on strong holiday sales, while KE Holdings (5.7%), Orient Overseas (1.9%), China Hongqiao Group (1.6%), and Meituan (1.5%) also posted notable rises.