HK stocks log worst week since April
The Hong Kong stock market had witnessed a steady recovery over recent weeks, rebounding from losses triggered by reciprocal tariffs imposed by US President Donald Trump. The benchmark Hang Seng Index has advanced 17% year-to-date.
'The Lujiazui forum this week offered no new measures to boost the capital market, which was a potential letdown for some investors,' said Jason Chan, senior investment strategist at Bank of East Asia. The two-day gathering of top financial regulators and market participants at the annual Lujiazui Forum wrapped up on Thursday, delivering few surprises for market participants.
Sentiment is expected to remain weak, with the persistent risk of an escalation in Middle East tensions continuing to cast a shadow over markets, Chan said. 'The market could stay range-bound in the short term.' China kept its benchmark lending rates unchanged on Friday, as expected, after rolling out sweeping monetary easing measures last month to support the economy.
China's blue-chip CSI300 Index closed 0.1% higher, while the Shanghai Composite Index lost 0.1%. Hong Kong benchmark Hang Seng was up 1.3%. For the week, the Hang Seng Index was down 1.5%, the biggest drop since the week of April 7, while the CSI300 Index was down 0.5%. Hong Kong's pullback was also exacerbated by fading interest from mainland investors. Their purchases via the Stock Connect scheme have slowed sharply in recent weeks, with net buying this week amounting to just 16 billion yuan ($2.23 billion) — only 20% of the peak recorded in April.
The CSI Liquor Index rose 2.2%, leading gains onshore, after the index lost 12% this year on weak consumer demand and a government ban on civil servants dining out. Amid uncertainties related to China-US trade friction, onshore share valuations may be range-bound at low levels near term, UBS strategist Lei Meng said in a note.
'We expect limited downside, and potential upside catalysts mainly from stronger policy easing, the continual entry of medium or long-term funds and structural reforms,' Meng said. Shares of 'Blind Box' toymaker Pop Mart dropped nearly 4% after state media outlet People's Daily called for stricter regulation of the blind box industry, citing expert views. The stock has fallen 13% this week, but soared 165% this year.
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