The Hang Seng index experienced a decline of 79 points or 0.4%, closing at 19,151 on Monday. This marks its third consecutive session of losses, bringing it to its lowest level in two months, largely due to downturns across most sectors. Traders are exhibiting caution in entering new positions as losses in Chinese markets extend, reaching a three-week low. This hesitance is compounded by the impending announcement from the Biden administration regarding new export restrictions targeting China, potentially impacting up to 200 Chinese chip companies with trade restrictions.
Concerns surrounding a weak recovery in China are resurfacing as investors await official data on PMI and industrial profits later this week. Adding to the negative sentiment, there are ongoing discussions between China and Germany regarding the resolution of tariff issues concerning Chinese electric vehicle imports.
In contrast, US futures have seen a rise, attributed to anticipations that Scott Bessent, Trump’s nominee for Treasury Secretary, will prioritize economic stability in his agenda. Among the notable losses in large-cap stocks were KE Holdings down 5.6%, Meituan sliding 2.7%, Sands China decreasing 2.6%, and Tencent Holdings falling 1.5%.
Despite the current setbacks, the main stock market index in Hong Kong, the HK50, has increased by 2104 points or 12.34% since the beginning of 2024. Projections indicate that the index may reach around 19,990.27 points by the quarter's end, as per global macroeconomic models and analysts' expectations. Looking ahead, it is estimated that the index could trade at 18,465.19 within the next twelve months.