FX.co ★ Hong Kong Stocks Extend Drop But Point to Strong Weekly Gain

Hong Kong's stock market experienced a decline on Friday, with the Hang Seng Index dropping 214 points, equivalent to a 0.9% decrease, settling at 23,241. This marks the second consecutive day of losses across all sectors. Investors exhibited caution in anticipation of crucial economic data from China expected next week: industrial output, retail sales, and housing market statistics. Concurrently, the People's Bank of China (PBoC) is poised to reassess its benchmark lending rates which have been maintained at historic lows recently to bolster the ailing economy.

Alibaba Group Holdings saw a significant drop of 4.9% following the release of underwhelming quarterly revenue figures. Other prominent companies also faced losses, including Kuaishou, which fell by 3.0%, Meituan at 2.7%, Trip.com down by 2.2%, and China Resources Land decreasing by 1.8%. Despite these setbacks, the Hang Seng Index is on course for its fifth consecutive week of gains—the longest streak since February—having risen over 1.5% to date.

The overall sentiment improved due to a substantial easing of Sino-U.S. trade tensions following the Geneva Deals. Further optimism was generated by Beijing's recent move to suspend its restrictions on rare earth exports for three months and to lift trade and investment prohibitions on 17 U.S. companies.