FX.co ★ Hong Kong Equities Down Slightly

On Wednesday morning, Hong Kong shares experienced a decline of 59 points, or 0.2%, settling at 23,324. This downturn reversed the gains from the previous session, largely due to declines in the financial and technology sectors. Traders remained cautious due to deflation worries in China, even though some investment banks increased their growth and export forecasts following a trade agreement with the U.S. Additionally, market sentiment was negatively impacted by an escalating price war in China’s automotive sector, marked by BYD Co. introducing new discounts on more than twelve models. Investors are now focusing on the upcoming official Purchasing Managers' Index (PMI) data for May from the mainland, with persistent concerns about weak factory activity. However, an overnight rally on Wall Street provided some relief and prevented further losses after U.S. President Trump announced a temporary halt on tariffs, coupled with a surprising rise in consumer confidence. In parallel, Moody’s improved Hong Kong’s credit outlook to “stable” from “negative,” acknowledging its robust credit profile despite global trade challenges. Among the early significant losers were Pop Mart International (-4.4%), Mixue Group (-3.9%), SMIC (-2.2%), and Lenovo Group (-1.2%).