Hong Kong Stocks Flat Ahead of Inflation Data

The Hang Seng Index traded flat to close at 25,132 on Tuesday as investors remained on the sidelines ahead of Hong Kong's inflation data due later in the day. Market participants continued to monitor escalating hostilities in the Middle East, which lifted oil prices and renewed concerns over inflation and the prospect of further interest rate hikes. The downside was limited as investors continued to draw support from Beijing's recent efforts to stabilize the stock market. Optimism was also aided by signs of improving conditions in Hong Kong's commercial property market after a major office tower owned by CK Asset Holdings, controlled by Li Ka-shing, began attracting tenants following a prolonged period of low occupancy. Among notable movers were Z.AI Co. (36.9%), Kingboard Laminates (12.3%), Semiconductor Manufacturing Corporation (8.2%), Shanghai Iluvatar CoreX (12.1%), and Lenovo (8.5%).

The Hang Seng Index surged 2.4%, or 581 points, to close at 25,143 on Monday, rebounding from Friday's sharp losses making it the best-performing major benchmark in Asia despite lingering geopolitical tensions in the Middle East. Sentiment improved after Beijing stepped up efforts to stabilize its stock market, with two major state-backed funds disclosing fresh equity purchases and regulators preparing to meet key industry participants, boosting confidence in Chinese assets. Bargain hunting following last week's global tech-led selloff and optimism over corporate earnings further supported risk appetite, although investors remained cautious over geopolitical risks and their potential impact on energy prices and global inflation. Among the top gainers were Tencent (3.5%), Semiconductor Manufacturing International Corporation (3.0%), Meituan (3.2%), Xiaomi (3.2%), Kuaishou Technology (4.6%), and Shanghai Iluvatar CoreX (4.9%).

The Hang Seng Index slipped 1.8%, or 446 points, to close at 24,562 on Friday, tracking a broad decline across Asian markets after a selloff in US semiconductor stocks weighed on investor sentiment and reignited concerns over elevated valuations in artificial intelligence-related companies. The weakness followed overnight losses on Wall Street, where technology shares retreated amid growing skepticism over whether substantial AI-related capital spending will generate sufficient returns to justify current market valuations. Sentiment toward Hong Kong equities was also weighed by a widening valuation discount to mainland-listed shares, reflecting persistent liquidity pressures and tighter capital outflow controls in China. Higher oil prices added to inflation concerns, reinforcing expectations that major central banks may remain cautious about easing monetary policy. Notable laggards included Knowledge Atlas (-28.5%), Tencent (-4.6%), SMIC (-10.0%), Xiaomi (-2.3%), and Meituan (-4.1%).