Hong Kong’s benchmark Hang Seng Index closed higher on Friday, alleviating some of the losses from its worst week in over seven years. The ongoing trade tensions between the United States and China have kept investors on edge, with no immediate resolution in sight.
The Hang Seng Index saw a 1.1% gain, ending the week with an 8.5% loss, marking its most significant decline since 2018. The index has tumbled 15.6% from its recent peak, wiping out a substantial HK$4.4 trillion in market value from its listed companies.
Technology stocks, including giants like Alibaba Group Holding and Xiaomi, saw a positive trend as the Hang Seng Tech Index rose by 1.8%. Meanwhile, mainland-listed firms tracked by the CSI 300 Index and the Shanghai Composite Index also saw modest gains of 0.4% and 0.5%, respectively.
Key players in the market experienced varied movements, with electric vehicle manufacturer BYD surging 7.2%, while travel platform Trip.com faced a 4.6% decline. Mainland investors remained active, injecting HK$11.7 billion through the Stock Connect scheme on Friday alone, bringing their total buying spree for the week to HK$82.27 billion.
Global financial institutions like Goldman Sachs and Morgan Stanley have adjusted their growth forecasts for China due to the escalating trade tensions. Goldman Sachs lowered its growth projections for 2025 and 2026, citing the impact of tariffs, while Morgan Stanley warned of potential setbacks in corporate earnings recovery. Nonetheless, ANZ Group suggested that Beijing could implement further fiscal measures to safeguard its economy.
The current market volatility reflects the broader economic uncertainties stemming from the prolonged trade dispute between the US and China. Investors are closely monitoring developments in the ongoing tariff war, with expectations of continued market fluctuations in response to geopolitical dynamics.
As the trade war persists, market participants are bracing for further escalations and potential repercussions on global economic growth. The resilience of the Hong Kong Stock Exchange amid these challenges underscores the significance of international trade dynamics and their profound impact on financial markets.