FX.co ★ More Pain Predicted For Hong Kong Stock Market

The Hong Kong stock market experienced a decline over the past two trading sessions, collectively losing close to 850 points, equating to a 4% reduction. The Hang Seng Index is now positioned just below the 20,320 mark, and it faces potential further setbacks on Wednesday.

The outlook for Asian markets appears pessimistic, influenced by disappointing economic data and earnings reports, with additional profit-taking activities possibly anticipated. With European and U.S. markets experiencing downturns, it is anticipated that Asian exchanges will continue this trend.

On Tuesday, the Hang Seng Index experienced a significant drop, primarily affecting technology shares. The index declined by 774.08 points, or 3.67%, to close at 20,318.79, moving between a low of 20,154.71 and a high of 21,095.01 during the day.

Highlighting specific stocks, Alibaba Group fell 5.09%, Alibaba Health Info declined 4.77%, ANTA Sports decreased 2.95%, China Life Insurance dropped 4.88%, China Mengniu Dairy slid 7.35%, China Resources Land sunk 4.04%, CITIC fell 2.69%, CNOOC retreated 4.22%, CSPC Pharmaceutical plunged 6.15%, Galaxy Entertainment dropped 4.02%, Haier Smart Home reduced 2.03%, Hang Lung Properties decreased 3.88%, Henderson Land fell 1.57%, Hong Kong & China Gas lost 2.25%, Industrial and Commercial Bank of China dropped 2.28%, JD.com decreased 4.92%, Lenovo fell 1.44%, Li Auto plunged 6.94%, Li Ning dropped 5.20%, Meituan decreased 6.97%, New World Development retreated 4.28%, Nongfu Spring declined 5.34%, Techtronic Industries slid 1.22%, Xiaomi Corporation fell 2.54%, and WuXi Biologics dropped 6.81%.

Wall Street set a weak precedent, with major indexes starting the day mixed but closing sharply lower by the close of trading on Tuesday.

The Dow Jones Industrial Average dropped 324.80 points, or 0.75%, to finish at 42,740.42. The NASDAQ Composite decreased by 187.10 points, or 1.01%, ending at 18,315.59, and the S&P 500 fell 44.59 points, or 0.76%, closing at 5,815.26.

This decline in U.S. markets was primarily due to profit-taking, as investors sought to capitalize on recent gains following record highs for the Dow and S&P 500 on Monday. Corporate earnings further pressured the markets, with companies like UnitedHealth (UNH) and Citigroup (C) seeing declines, whereas Walgreens Boots Alliance (WBA) saw gains based on its performance.

From an economic perspective, the Federal Reserve Bank of New York announced that regional manufacturing activity had reverted to contraction in October, adding another layer of concern.

Oil prices also saw a steep decline on Tuesday. Concerns about potential supply disruptions eased following news that Israel would refrain from targeting Iranian oil infrastructure. As a result, West Texas Intermediate crude oil futures for November fell by $3.25, or 4.4%, settling at $70.58 per barrel.