Hang Seng Drops to 11-Week Low!
The Hang Seng Index weakened on Monday, dropping 437 points (1.5%) to 24,585, extending last week's decline and reaching its lowest level since March. The decline occurred as investors reduced exposure to technology and growth stocks following continued pressure on global AI stocks.
Sentiment worsened as the market reassessed the interest rate outlook following stronger-than-expected US economic data. The solid jobs report reinforced the view that the Federal Reserve could keep borrowing costs high for longer, which typically puts pressure on risk assets and growth stock valuations.
Geopolitical risks added to the pressure. Reports that Iran fired missiles toward Israel tested the fragile ceasefire and pushed oil prices higher. The oil rally added to inflation concerns, making the market more cautious about a scenario of continued tight monetary policy.
In Hong Kong, declines were led by the technology, financial, and retail sectors. Several large-cap stocks were the main drags, including Tencent (-1.2%), AIA (-1.0%), Kingboard Laminates (-5.3%), Lenovo (-5.1%), and Kuaishou (-3.5%).
Looking ahead, the Hong Kong market is likely to remain sensitive to two triggers: the direction of global interest rates following strong US data, and Middle East headlines that could quickly shift risk premiums on energy and inflation. As long as these two factors remain unabated, the index's recovery potential is potentially limited, and movements will remain selective by sector. (asd)
Source: Newsmaker.id
