News Maker 23

Hong Kong stocks posted modest gains during Monday's trading (Oct 12), with the Hang Seng Index rising approximately 0.2%, even as mainland Chinese markets faced downward pressure. Investors remain cautious regarding rising global interest rates and trade tensions, while Beijing's market support measures have yet to fully restore investor confidence.

In mainland China, the CSI 300 fell about 0.7% to a 13-month closing low, while the Shanghai Composite declined 0.4%. Sentiment was also dampened after the United States launched investigations into several Chinese technology companies, including Luxshare Precision and Foxconn Industrial Internet. Foxconn shares plunged around 7%, while Luxshare fell 3%.

Hong Kong's market performance was relatively stronger, driven by gains in banking and insurance stocks, even though the chip and artificial intelligence (AI) sectors remained under pressure. Investors have shown little reaction to moves by Chinese regulators to resume discussions with market participants on strengthening capital markets and drafting rules to facilitate the establishment of equity mutual funds.

Externally, rising global bond yields remain a primary concern for investors. Oil prices hovering above US$100 per barrel due to the Middle East conflict are heightening inflation risks and could prompt central banks to maintain high interest rates for longer. Meanwhile, escalating trade tensions threaten Chinese exports, a key pillar of the economy.

Newsmaker observes that the Hang Seng's modest rise is insufficient to signal a strong trend reversal. Hong Kong stocks continue to face pressure from global yields, oil prices, and uncertainties surrounding trade and the technology sector. However, should Beijing adopt a more aggressive stimulus stance and global pressures begin to ease, the Hang Seng could find room for a rebound. For now, investors still tend to favor financial stocks over the technology sector, which is more sensitive to global sentiment.

Source: Newsmaker.id