Hong Kong Stocks Post Biggest Monthly Loss in 2 Years

The Hang Seng Index fell 426 points, or 1.6%, to close at 25,963 on Friday, retreating after ending flat in the previous session, as investors turned cautious despite record highs on Wall Street fueled by the AI rally and strong US corporate earnings. Sentiment was dampened as markets awaited concrete outcomes from the ongoing Trump-Xi summit in Beijing, with traders reluctant to take aggressive positions despite optimism surrounding US-China relations. Meanwhile, oil prices headed for a weekly gain amid ongoing tensions around the Strait of Hormuz, raising concerns over potential supply disruptions, higher inflationary pressures, and risks to global growth. Broad-based weakness in financial and technology shares weighed on the index. Among notable laggards were Tencent Holdings (-0.4%), Xiaomi Corporation (-2.7%), Meituan Class (-3.1%), Pop Mart (-3.1%), and Kuaishou Technology (-2.8%). In contrast, Semiconductor Manufacturing International Corporation increased by almost 2%.

The Hang Seng Index traded flat to close at around 26,389 on Thursday, as early gains faded and investors remained cautious while closely monitoring ongoing talks between US President Donald Trump and Chinese President Xi Jinping in Beijing. Sentiment was initially supported by hopes that the summit could help stabilise US-China relations and reduce geopolitical tensions, particularly around trade, tariffs, AI, and regional security issues. However, gains faded as the session progressed, as traders turned more cautious ahead of potential policy signals and diplomatic developments emerging from the meeting. Electronic technology shares continued to support to the market, with InnoScience Technology and Li Auto gained 2.5% and 4.3%, respectively. In contrast, Tencent Holdings (-0.6%), Semiconductor Manufacturing International Corporation (-3.5%), Meituan Class (-2.3%), and Xiaomi Corporation (-0.1%) declined.

The Hang Seng Index surged 160 points, or 0.6%, to 26,550 on Thursday, extending gains from the previous session as optimism over easing US-China tensions lifted sentiment across Hong Kong equities. Markets rose as investors priced in reduced geopolitical risk and potential stabilisation of US-China relations ahead of the Trump-Xi summit in Beijing. The advance also tracked broader regional strength, with technology-related stocks acting as the main driver of the rally. Tencent Holdings led gains, up 2.6%. Among other notable movers were Meituan Class (3.9%), InnoScience Technology (3.4%), Kuaishou Technology (4.8%), Xiaomi Corporation (2.2%), and Semiconductor Manufacturing International Corporation (1.6%). However, markets remain sensitive to developments in US economic data, Federal Reserve interest rate expectations, and any updates on US-China diplomatic talks, which could quickly shift momentum in either direction.