Hong Kong Stocks Fall as Investors Weigh US Inflation Risks
Hong Kong stocks declined during Thursday's trading (July 30), mirroring pressure seen on Wall Street. The Hang Seng Index fell 0.2%, or approximately 59 points, to 24,893, after the Federal Reserve maintained interest rates while highlighting persistent inflation risks.
In line with the Fed's decision, the Hong Kong Monetary Authority (HKMA) also kept its benchmark interest rate at 4.0%. This move aligns with Hong Kong's pegged exchange rate system against the US dollar, which causes the city's monetary policy to track US interest rate movements.
Investor sentiment was further dampened by a sharp rise in long-term US Treasury yields. Additionally, concerns regarding the scale of artificial intelligence (AI) spending resurfaced following mixed earnings reports from US technology companies.
Pressure also stemmed from escalating tensions in the Middle East, which drove Brent crude oil prices up by nearly 8%. However, the Hang Seng's decline was somewhat mitigated by the strong debut of Zhongji Innolight—a maker of AI optical modules—which raised HK$53.4 billion in Hong Kong's largest IPO in seven years.
Regarding market impact, the Hang Seng is likely to remain volatile as investors await China's PMI data on Friday. Should Chinese economic data show weakness, pressure on Hong Kong stocks could persist. Stocks weighing on the index included Tencent (-0.7%), Xiaomi (-3.0%), Z.AI Co. (-5.2%), SMIC (-2.8%), and Meituan Class (-1.3%). (asd)
Source: Newsmaker.id
