Hang Seng Slips; Financial Stocks Under Pressure
The Hang Seng Index fell 0.4%, or approximately 110 points, to 25,420 during Friday's trading session. Investors adopted a cautious stance after renewed tensions in the Strait of Hormuz drove up oil prices and heightened concerns that global inflationary pressures might persist. Brent crude climbed back toward US$83 per barrel as plans to reopen the waterway faced ongoing obstacles.
There are concerns that rising energy prices could limit the scope for global central banks to loosen monetary policy. Persistently high energy costs threaten to sustain price pressures and push up bond yields, thereby dampening investor appetite for risk assets in Asia.
The heaviest pressure on the Hang Seng came from insurance and banking stocks. Investors are worried about China's stepped-up tax enforcement regarding income from overseas insurance policies held by mainland Chinese residents. Tax authorities have reportedly begun levying a 20% income tax on interest and dividends from certain offshore insurance products.
Nevertheless, the index's decline was tempered by gains in several technology stocks. MiniMax surged 6.5% after being included in the Stock Connect program, which opens the door for increased participation by mainland Chinese investors. Tencent rose 0.7%, Z.AI gained 5.2%, Kingboard Laminates climbed 5.6%, and WuXi Biologics rose approximately 3%.
Market Impact
The Hang Seng is likely to remain volatile as tensions in the Strait of Hormuz keep oil prices high and uncertainty regarding Chinese tax regulations continues to weigh on the financial sector. However, gains in AI and technology stocks could help cushion the correction. The 25,300 level serves as immediate support, while the index needs to reclaim the 25,600 mark to pave the way for further gains. (gn)
Source: Newsmaker.id
