Hang Seng Retreats as Wall Street Slide, IPO Concerns Weigh

Hong Kong shares dipped 314 points, or 1.2%, to 25,712 on Thursday morning deals, snapping a three-session advance after Wall Street’s sharp overnight decline. The U.S. Fed left interest rates unchanged Wednesday, as expected, but Chair Jerome Powell warned that surging energy costs tied to Middle East disruptions could fuel inflation. Meanwhile, caution mounted after reports that Beijing is tightening scrutiny of Chinese firms incorporated offshore seeking Hong Kong listings, raising concerns over the city’s IPO pipeline, at least in the near term. Still, losses were partly contained by expectations that the People's Bank of China may keep its key lending rates at record lows for a 10th straight month to support the economy, with the March fixing due Friday. All Hang Seng sectors posted steep losses, led by property, tech, and consumer stocks, as mainland markets also slumped. Major laggards included Zijin Mining (-7.0%), Tencent (-5.7%), China Hongqiao (-3.7%), and SMIC (-3.2%).

The Hang Seng rose 157 points, or 0.6%, to finish at 26,025 on Wednesday, reversing morning losses and extending gains from the prior session as most sectors advanced. Sentiment improved amid a jump in U.S. futures ahead of the Fed’s rate decision and its first 2026 projections later today. While policy rate is expected to remain steady, markets are watching for signals on whether Jerome Powell will stay on the board after his term as chair ends in May. In China, stocks edged higher ahead of Friday’s PBoC lending rate review. Risk appetite was also lifted by reports that Nvidia secured approval to sell advanced AI chips in the mainland. Separately, Cathay Pacific said it would extend its suspension of Middle East flights until April 30. Top performers included Minimax Group (19.4%), Knowledge Atlas (18.6%), CK Hutchison (2.9%), Henderson Land Development (2.5%), and AIA Group (1.6%). In contrast, Geely Auto fell 3.2% after posting flat annual profit despite stronger sales and margins.

Hong Kong stocks fell 32 points, or 0.1%, to 25,897 in Wednesday morning trade, reversing gains from the prior two sessions as weakness in tech and consumer shares weighed. Sentiment was hit by a fifth straight decline in mainland markets, with traders cautious ahead of China’s lending rate fix on Friday. Rates were last held at record lows for nine months to support economic growth. In the U.S., the Federal Reserve is expected to keep policy rate steady later today while unveiling its first 2026 projections, as oil markets reel from the Iran war. The conflict also clouds prospects for the Trump–Xi Jinping summit later this month, with Washington urging Beijing to help reopen the Strait of Hormuz. Locally, several key data releases are expected in the city, including the February jobless rate, inflation figures, and the Q4 current account. Early laggards included Tencent Music Entertainment (-21.4%), Kingboard Laminates (-5.9%), Prada Spa (-3.6%), and China Resources Land (-1.7%).