Hong Kong Shares Sink to 6-Week Low on Geopolitical Tensions

Hong Kong stocks plunged 667 points, or 2.5%, to 25,958 on the first trading day of March, notching a six-week low and reversing gains from the prior session. Sentiment soured after U.S. futures slumped, following President Donald Trump’s vow to “avenge” the deaths of three service members and continue combat operations in Iran. The renewed conflict heightened fears of oil shipment disruptions through the Strait of Hormuz, a key energy route. Traders also grew cautious ahead of China’s February PMI data. Losses were partly offset by modest gains in mainland shares, as expectations rose that the upcoming National People’s Congress, starting March 4, may unveil fresh support measures for tech, innovation, and domestic consumption. All sectors fell sharply, with declines ranging from 1.9% in consumer stocks to nearly 3% in financials. Notable laggards included SenseTime Group (-7.0%), Xiaomi (-4.0%), Cathay Pacific (-3.6%), Kuaishou Tech. (-3.4%), AIA Group (-3.3%), and SMIC (-3.2%).

HK50 decreased to 26260.00 Index Points, the lowest since January 2026. Over the past 4 weeks, Hong Kong Stock Market Index (HK50) lost 2.02%, and in the last 12 months, it increased 14.29%.

The Hang Seng climbed 249 points, or near 1%, to close at 26,657 on Friday, reversing a 1.4% drop in the prior session and ending the week up 0.8% amid broad sector gains. Optimism mounted ahead of China’s National People’s Congress, set to begin March 5, with traders hopeful for policies supporting tech, innovation, and domestic consumption. Investors also looked past a sharp fall in U.S. futures, shifting focus to China’s February PMI data due next week. Property stocks led the upturn, jumping 2.8%, after Shanghai eased homebuying rules to spur the sector recovery. Consumer shares advanced on low valuations, and tech stocks rebounded from recent losses. Notable movers included Sun Hung Kai Properties (6.6%), Pop Mart Intl. (2.8%), Muyuan Foods (2.6%), and AIA Group (2.3%). Despite the upside, the index lost 2.8% in February, reversing January's solid gains, as uncertainty over U.S. tariffs, concerns about global tech valuations, and renewed geopolitical risks pressured sentiment.