Hang Seng Weakens, Geopolitics & China Data Raise Caution
The Hang Seng Index fell 251 points (-0.9%) to close at 26,459 on Wednesday. The decline snapped the previous session’s strong rally and pulled the benchmark away from a seven-week high, as broad-based selling hit most sectors.
Profit-taking dominated ahead of key China inflation data, with December CPI and PPI figures due later this week. Markets also turned cautious ahead of Hong Kong’s foreign exchange reserves report for end-2025, scheduled for release today, prompting many traders to trim risk exposure.
Geopolitical tension added to the pressure after China imposed export restrictions on “dual-use” goods to Japan—items that could have military applications. Tokyo pushed back, calling the move “completely unacceptable,” reigniting concerns over regional trade ties and potential supply-chain disruptions across Asia.
In the US, equity index futures were mixed after the S&P 500 and Dow closed at fresh records on Tuesday. Investors are now positioned cautiously ahead of a busy slate of US economic releases that could influence expectations for the Fed’s next policy steps. Still, losses in Hong Kong were partly capped after the People’s Bank of China (PBoC) signaled potential cuts to the reserve requirement ratio (RRR) and interest rates this year to support growth.
Meanwhile, mainland Chinese equities held near their highest levels in more than a decade, helped by stronger turnover and improving profit expectations. In Hong Kong, tech names weighed the most, led by declines in Tencent Music (-5.1%), Kuaishou (-3.0%), Meituan (-2.2%), and SMIC (-2.0%).
Source: Newsmaker.id
