Hong Kong Stocks Retreat

The Hang Seng Index declined 0.6%, or 145 points, to close at 24,131 on Wednesday, reversing part of previous session's rebound, as renewed gains in oil prices revived inflation and interest-rate concerns. Brent crude rose above US$101 a barrel after a storm threatened US Gulf oil facilities and Iran-backed Houthis launched attacks on targets in Saudi Arabia, raising concerns over global energy supplies. The rise in oil prices offset positive cues from Wall Street, while markets continued to scale back expectations for another Federal Reserve rate hike this month. Hong Kong trading also remained subdued as mainland Chinese markets and Southbound Stock Connect stayed closed for the National Day holiday, limiting mainland buying support. Healthcare and technology stocks, which led Tuesday’s rebound, came under renewed selling pressure,  with Tencent (-1.8%), Wuxi Biologics (-2.1%), Genscript Biotech (-12.7%), Xiaomi (-1.3%), and Z.AI Co. (-2.7%) among the notable decliners.

The Hang Seng Index climbed 1.0%, or 240 points, to close at 24,281 on Tuesday, extending gains as a technology-led rally in global markets boosted sentiment. Wall Street closed higher overnight on AI optimism and buyout activity, even as Treasury yields hovered near 5.31%. Lower oil prices also supported risk appetite, with Brent crude hovering around US$100 a barrel after falling 1.9% in the previous session as Middle East exports increased and G7 nations pledged to boost supplies. Trading remained relatively thin as mainland Chinese markets stayed closed for the National Day holiday. AI-related shares remained in focus, with biotech also rising. HSBC also drew attention after the HKMA questioned its decision to establish a global AI hub in Singapore rather than Hong Kong. Notable movers included Z.AI Co. (7.6%), Tencent (1.2%), Genscript Biotech (7.7%), Xiaomi (1.6%), and Wuxi Biologics (4.5%).

The Hang Seng Index rose 0.3%, or 68 points, to close at 24,020 on Monday, recovering earlier losses and following a 2.6% decline in the previous session. The rebound came despite pressure on rate-sensitive property and financial stocks, as elevated US Treasury yields and concerns over higher oil prices weighed on sentiment. Sentiment was supported by weaker-than-expected US employment data, which reduced expectations for another Fed rate hike this month, while Treasury yields eased. Semiconductor and Tech stocks led the gain, with Kingboard Laminates surging 11.9%, Z.AI Co. rising 6.2% and Lenovo gaining 4.7%. However, Brent crude remained around US$102 a barrel, keeping inflation concerns in focus. Trading was subdued as mainland Chinese markets remained closed for the National Day holiday. Meanwhile, Budweiser Brewing Company fell 2.1% after flagging a US$52 million withholding-tax charge. Hong Kong retail sales rose 2.9% year-on-year in August, the fastest growth in three months.