Market Commentary - Foreign Markets
Hong Kong Market falls on US rate concerns, Taiwan tensions As on : 24-May-24  16:20

Hong Kong share market finished session deeply in negative territory on Friday, 24 May 2024, on following the broadly sell-off on Wall Street overnight, after the recent release of stronger-than-expected US economic data and the slightly hawkish Fed minutes deterring hopes of cutting US interest rates in the near future. Meanwhile, sentiments dented further amid escalating geopolitical tensions between China and the Taiwan.

City market commenced trading with weak note after robust US economic data along with hawkish minutes from the Fed's last meeting earlier in the week has led traders to dial back their bets on rate cuts this year, with markets now pricing in just 35 basis points of easing in 2024, versus expectations of 150 bps of cuts at the start of the year.

Investors also closely monitored regional tensions as China's military carried out a second day of war games around Taiwan on Friday, with drills to test their ability to seize power and control key areas, exercises it has said were launched to punish Taiwan's President Lai Ching-te.

At closing bell, the benchmark Hang Seng Index fell 259.77 points, or 1.38%, to 18,608.94. The Hang Seng China Enterprises Index dropped 96.54 points, or 1.44%, to 6,605.24.

All but eight of the 82 index members declined. Among key blue-chips stocks, Tencent lost 1.3% to HK$377, e-commerce firm JD.com retreated 3.3% to HK$119.60 and food delivery platform Meituan lost 2.7% to HK$116.30. Alibaba fell 0.6% to HK$78.15 after the company said on Thursday it would raise US$4.5 billion by issuing convertible bonds and use the proceeds to fund share repurchases.

Shares of lenders and developers were also lower. New World Development lost 3.4% to HK$9.13, Hang Lung Properties weakened 4.3% to HK$7.64 and Hang Seng Bank slipped 2% to HK$110.10

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