Market Overview
Hong Kong's leading share index, the HK 50, has recently experienced profit-taking after a robust performance in January. The index briefly surpassed the 27,402 mark but has since retreated to around 26,621. Analysts suggest that there is some support at the 26,200 level, which will be crucial for the market's stability.
Influences on the Market
The decline in Hong Kong stocks is attributed to a broader downturn in US markets, particularly influenced by investor concerns regarding Donald Trump's nomination for the Federal Reserve. Additionally, technology stocks are facing pressure due to apprehensions about their high valuations.
Economic Outlook
A report from Standard Chartered Bank presents a cautiously optimistic outlook for the Hong Kong economy, highlighting growth driven by financial services and private consumption. The bank forecasts a GDP growth of 3.5% for 2025, an increase from 2.6% in 2024, alongside expectations for growth in cross-border spending and a healthy IPO market.
However, the bank maintains a 2026 GDP growth forecast of 2.5%, citing global uncertainties as potential risks. Analysts emphasize that while financial services are expected to thrive, the economy remains vulnerable to global trends, including geopolitical risks and trade policy uncertainties.
Market Sentiment
Despite the recent downturn, the market appears to be pausing, with future movements likely influenced by developments in the US following significant losses on Wall Street. Investors are advised to monitor these trends closely as they could impact the Hong Kong market's trajectory.