Hang Seng Down, Energy and Inflation Risks Again Weigh on Sentiment
Hong Kong stocks weakened in Friday morning trading, extending their decline to three straight sessions following Wall Street's overnight decline. The Hang Seng Index fell 225 points, or 0.9%, to 25,495, and is on track for a second consecutive weekly decline, down around 1.0% so far this week.
Sentiment pressure stems from the escalating US-Iran conflict, which has entered its 14th day, amid Tehran's statement that it will keep the global oil glut closed. Markets believe the risk of energy supply disruptions could prolong oil price pressures, exacerbate inflation concerns, and increase the risk of a tightening of financial conditions that are typically hostile to risk assets.
In China, stocks edged lower after two sessions of gains, with investors holding positions ahead of next week's release of January-February activity data, including industrial production, retail sales, and the unemployment rate survey. The anticipation of this data is key to assessing the strength of domestic demand and the direction of the recovery, especially as global sentiment is clouded by geopolitical and energy uncertainties.
Despite the weakening, the decline was reportedly restrained by the view that most macro risks were already reflected in prices, prompting some investors to continue accumulating undervalued stocks. However, selling pressure was widespread across sectors in Hong Kong, indicating that risk appetite has not yet fully recovered.
Among the index's decliners, Orient Overseas fell 7.2%, SenseTime fell 5.2%, Cathay Pacific fell 3.1%, Zijin Gold International fell 2.6%, and SMIC fell 1.7%. This decline suggests investors are tending to reduce exposure to stocks sensitive to global cycles, trade, and technology sentiment.
Looking ahead, the Hong Kong market will monitor two main channels: developments in the conflict and its implications for energy prices and inflation, and the release of Chinese data next week, which could potentially alter assessments of the demand and policy outlook. (asd)
Source: Newsmaker.id
