Hang Seng Drops 1%, Trump-Xi Hopes Limit Losses
The Hang Seng Index fell 251 points, or 1.0%, to close at 25,466 on Friday, extending its decline for the third straight session. The index also recorded its third consecutive weekly decline, down 1.1%, as selling pressure spread across almost all sectors.
Sentiment worsened after US stock futures fell sharply, while the Middle East conflict approached two weeks with no sign of resolution. Tensions escalated as Tehran threatened to disrupt activity in the Strait of Hormuz, keeping oil prices high and resurfacing inflation concerns. The risk of this energy shock pushed investors back on the defensive and curbed exposure to riskier assets.
Pressure also came from mainland China. Mainland markets weakened ahead of the release of February credit data and several key activity indicators, including retail sales, which will provide clues as to whether domestic momentum is strong enough to withstand the slowdown. The uncertainty of the data prompted market participants to wait for confirmation before adding risk.
However, the Hang Seng's decline was relatively restrained by reports that Scott Bessent would meet He Lifeng in France on March 15-16, ahead of the planned Trump-Xi meeting in Beijing at the end of March. Expectations of this dialogue helped ease market concerns about policy escalation and provided a cushion against a deeper sell-off.
At the stock level, the decline was led by several large issuers. Zijin Gold International fell 8.0%, Minimax Group fell 6.6%, MTR Corp. fell 6.6%, Knowledge Atlas fell 4.1%, and AIA Group fell 3.1%.
Impacts to watch for in markets:
Oil and Hormuz risk: If oil remains high, inflationary pressures could curb risk appetite and weigh on Asian equities.
US futures and yields: anchor daily sentiment for the Hang Seng.
China data (credit, retail): determine whether the market has grounds for a fundamental-based rebound.
US-China diplomacy agenda: any positive or negative signals could quickly shift regional sentiment.(Cp)
Source: Newsmaker.id
