Hong Kong Stocks Slip on Geopolitical, Fed Concerns

The Hang Seng Index slipped 1.1%, or 250 points, to 25,323 on Monday, amid heightened risk aversion as renewed US-Iran tensions raised concerns over higher oil prices and inflation. US forces struck Iranian rocket launchers near the Strait of Hormuz, pushing Brent crude higher and weighing on Asian equities. Hawkish remarks from Federal Reserve Chair Kevin Warsh also revived expectations of a September US rate hike, with markets pricing a 57% chance of a move. Higher US Treasury yields and a stronger dollar further pressured risk assets, while investors awaited US jobs and inflation data for clues on the Fed’s policy path. Meanwhile, China’s manufacturing PMI rose to 49.8 in August from 49.2 in July, beating expectations of 49.7 but remaining in contraction for a second consecutive month. The non-manufacturing PMI held at 49.0. Notable losers included Tencent (-0.9%), China Resources Land (-2.8%), AIA (-1.7%), Lenovo (-1.3%), and Zijin Gold International (-8.1%).

The Hang Seng Index edged up 0.1%, or 19 points, to close at 25,585 on Friday as strong global technology sentiment following Nvidia’s upbeat earnings and outlook provided support, while investors awaited Federal Reserve Chair Kevin Warsh’s speech at the Jackson Hole symposium later in the day. Nvidia’s results reinforced expectations for robust AI infrastructure demand, supporting Hong Kong’s tech-heavy market despite concerns over the sustainability of AI spending. Meanwhile, caution ahead of Warsh’s speech kept investors focused on clues about the Fed’s rate outlook. Among stocks, Meituan was also in focus ahead of its second-quarter results due later in the day, with investors watching margins amid intense competition and subsidies following its third consecutive quarterly loss in Q1. Notable gainers included Tencent (+1.7%), Kingboard Laminates (+2.8%), Xiaomi (+1.2%), and AIA Group (+1.1%). However, for the week to date, the benchmark is down 1.6%.

The Hang Seng Index fell 0.3%, or 84 points, to close at 25,566 on Thursday, giving back part of the previous session’s gains as investors remained cautious despite strong Nvidia earnings. Nvidia’s revenue more than doubled year-on-year to $96.2 billion in the second quarter, reinforcing optimism over continued AI demand. However, US inflation remained elevated, with the PCE price index holding at 3.7% year-on-year in July and core PCE at 3.3%, keeping expectations for Federal Reserve rate cuts subdued. Meanwhile, Alibaba remained in focus after completing its HK$80 billion share placement, with concerns over heavy AI spending and shareholder dilution weighing on sentiment. On the data front, China’s industrial profits rose 17.6% year-on-year in the first seven months of 2026, slowing from an 18.7% increase in the first half. Market moves were mixed, with Kingboard Laminates (10.5%), Z.AI (12.6%), and MiniMax (3.8%) advancing, while WuXi XDC (-2.3%) and Xiaomi (-3.4%) declined.