Hong Kong Stocks Flat Despite Softer US Inflation

The Hang Seng Index was little changed on Thursday, hovering around 25,400, as investors remained cautious following the previous session’s decline despite softer US inflation data that reinforced expectations for a more accommodative Federal Reserve policy. Asian markets were generally firmer after US consumer price data eased inflation concerns and supported expectations for a more accommodative monetary-policy outlook. However, gains in Hong Kong were limited as investors continued to assess weakness in technology shares and geopolitical risks. Technology stocks remained a major focus as investors digested Tencent’s second-quarter results and continued to assess developments in China’s artificial-intelligence sector. Tech performance was mixed, with Z.AI Co. (2.0%), MiniMax (1.2%) and SMIC (2.0%) gaining, while Tencent (-2.6%) and AIA (-0.3%) declined. Investors also monitored upcoming corporate earnings and developments in China's technology sector.

The Hang Seng Index slipped 0.8%, to close at 25,440 on Wednesday, as fading hopes for a US-Iran deal and caution ahead of the latest US inflation data weighed on investor sentiment. Oil prices climbed to a one-week high amid tensions surrounding the Strait of Hormuz, raising concerns over inflation and global growth. The decline also followed losses on Wall Street. In the region, Hong Kong technology stocks remained under pressure, with investors closely watching Tencent’s second-quarter earnings for signs of growth in gaming, advertising and AI investments. Meanwhile, plans to expand the Hang Seng Tech Index from 30 to 50 constituents could increase exposure to emerging sectors such as AI and robotics. Hong Kong’s IPO market also remained in focus, with Shein reportedly preparing to launch its Hong Kong IPO, supporting optimism over the city’s capital-market activity. Notable laggards included Tencent (-2.0%), Meituan (-1.5%), Xiaomi (-1.1%), AIA (-0.3%), and Kuaishou (-2.6%).

The Hang Seng Index fell 1.1%, or 206 points, to close at 25,653 on Tuesday, as investors turned risk-averse after hopes for a near-term reopening of the Strait of Hormuz faded, pushing oil prices higher and reviving inflation concerns ahead of the US July CPI report later in the day. The decline also tracked overnight weakness on Wall Street, where semiconductor stocks led losses. Tech stocks came under renewed pressure, offsetting support from continued interest in Chinese equities and corporate earnings. Techtronic Industries remained in focus after the power-tool maker reported first-half profit above market expectations, with gross margin rising to a record 42.9%. Investors also watched Creality following its Hong Kong listing, as it seeks to move toward higher-value, easier-to-use products, while robust IPO activity continued to underpin market sentiment. Notable laggards included Tencent (-2.2%), Z.AI Co. (-4.8%), Kingboard Laminates (-2.1%), Xiaomi (-3.5%), and Meituan (-1.0%).