HK Stocks Slip as Relief Rally Fades on Macro Caution

The Hang Seng Index fell 1.0% to around 25,071 on Thursday, extending losses as the recent relief rally lost momentum and investors turned cautious after a two-day advance. Sentiment stayed fragile as investors weighed mixed signals on U.S.-Iran talks. Optimism over possible de-escalation contrasted with ongoing uncertainty, even as global equities found some support. Regional caution persisted despite overnight gains on Wall Street. At the same time, foreign outflows from Asian equities, elevated bond yields, and concerns over a potential energy shock continued to weigh, while slowing growth capped upside. Notable laggards included Tencent Holdings (-0.89%), Kuaishou Technology (-9.71%), Meitu Inc. (-0.84%), and Pop Mart International (-1.49%).

The Hang Seng Index rose 1.1% to close 25,336 on Wednesday trading, marking a second straight session of gains, supported by easing oil prices and a pause in immediate geopolitical escalation that helped stabilize risk sentiment. Investors reassessed earlier concerns over a potential energy shock, after surging crude prices and rising global bond yields had triggered heavy foreign outflows from Asian equities and pressured valuations across the region. Despite the uptick, investors remained cautious, with lingering concerns over liquidity, growth momentum, and the risk of renewed oil spikes likely to keep markets volatile in the near term. All stock sectors traded in the green, except for energy minerals, communications and consumer services. Notable movers included Meituan Class B (+13.92%), Semiconductor Manufacturing (+2.36%), and AIA Group Limited (+2.00%). In contrast, Pop Mart International (-22.51%) and Tencent Holdings (-1.65%) declined.

The Hang Seng surged 681 points, or 2.8%, to end at 25,064 on Tuesday, halting a three-day losing streak with broad sector gains as bargain hunters entered after local markets hit their lowest since early August. Sentiment also improved after U.S. President Trump cited “productive” talks with Iranian officials, despite Tehran denying negotiations. Meantime, mainland stocks rebounded on reports that China would halve planned fuel price hikes to ease the burden on drivers. Further, PBoC Governor Pan Gongsheng pledged to maintain a supportive policy to foster stable growth and financial market stability. However, caution emerged ahead of Hong Kong’s February trade data following December’s swing to a deficit. Alibaba Hong Kong jumped 3.3% after unveiling a next-gen chip for agentic AI. Meantime, China Resources Beer jumped 8.2% on stronger sales, while Li Ning gained .44% on upbeat guidance. Cathay Pacific added 1.7% after extending flight cancellations to Dubai and Riyadh through May.