Hong Kong Stocks Fall on Middle East Risks

The Hang Seng Index fell 0.4%, or 100 points, to 25,029 on Wednesday, retreating after ending flat in the previous session as renewed geopolitical tensions dampened investor sentiment, outweighing support from gains in semiconductor stocks that tracked a strong rally on Wall Street. Oil prices edged higher after US forces continued strikes on Iranian military targets for an 11th consecutive night. Notable laggards included Tencent (-3.6%), Z.Ai Co (-3.0%), Xiaomi (-3.9%), Meituan (-3.5%), and AIA (-1.2%). Investors also monitored Zhongji Innolight's planned Hong Kong IPO, which aims to raise up to HK$55.05 billion in what could become the city's largest listing this year, while reports said Moonshot AI plans to begin talks in August on a final funding round ahead of a Hong Kong listing, targeting a valuation of up to $50 billion amid strong demand for its latest AI model.

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%).