The Hong Kong stock market experienced declines over the past two consecutive sessions, dropping more than 600 points, equating to a 3% decrease. As a result, the Hang Seng Index currently rests below the 19,800 mark. However, expectations are high for an upward trend as the market opens on Tuesday. Globally, predictions for the Asian markets are mixed but lean towards a positive outcome, driven largely by optimism in the technology sector. While European markets experienced a downturn and the U.S. markets were varied, Asian markets are likely to mirror the mixed U.S. trading pattern.
On Monday, the Hang Seng reported a modest decline, largely influenced by losses in technology and real estate sectors. The index saw a decrease of 175.75 points, or 0.88%, closing at 19,795.49. It fluctuated between 19,726.15 and 20,049.21 throughout the session. Notable movements among active stocks included Alibaba Group, which fell by 1.63%, and Alibaba Health Info, which stumbled by 2.76%. Other significant performers were ANTA Sports (-0.12%), China Life Insurance (-1.75%), and China Mengniu Dairy (-3.55%). Meanwhile, China Resources Land decreased by 2.35%, CITIC lost 0.67%, and CNOOC advanced by 0.79%. CSPC Pharmaceutical also experienced a significant decline, tanking 3.54%, while Galaxy Entertainment dropped 3.34%. Haier Smart Home and Techtronic Industries saw a slight decrease of 0.37%, and Henderson Land fell by 1.42%. On the positive side, both Hong Kong & China Gas and Lenovo edged up by 0.66%. Industrial and Commercial Bank of China showed remarkable growth, jumping 1.67%, while JD.com was down 0.28%. Li Auto dropped 0.58%, Li Ning dipped 1.65%, and Meituan weakened by 1.85%. New World Development saw a significant plummet of 6.08%, Nongfu Spring shed 1.11%, and Xiaomi Corporation retreated 3.19%. WuXi Biologics tumbled 2.92%, and Hang Lung Properties remained unchanged. Wall Street's influence brought a cautiously optimistic outlook as major averages opened mixed on Monday and closed in a similar state.
On Wall Street, the Dow Jones Industrial Average dropped 110.58 points, or 0.25%, closing at 43,717.48. In contrast, the NASDAQ surged by 247.17 points, or 1.24%, reaching a record closing of 20,173.89, while the S&P 500 rose by 22.99 points, or 0.38%, ending at 6,074.08. This general strength reflects the market's optimism regarding interest rates ahead of the Federal Reserve's forthcoming monetary policy decision. There's a broad expectation that the Fed will continue to cut interest rates, with the CME Group's FedWatch Tool suggesting a 99.1% probability of a 25 basis point rate cut.
Particularly, the NASDAQ's increase was driven by strong performance in semiconductor stocks, evidenced by a 2.1% rise in the Philadelphia Semiconductor Index. Networking stocks also performed well, furthering an upward trend and pushing the NYSE Arca Networking Index up by 2.0%, marking a new record closing high.
Nevertheless, purchasing enthusiasm was slightly muted due to data showing persistent inflation, raising concerns that the Fed may decelerate rate cuts more than previously expected next year. Additionally, the Federal Reserve Bank of New York published a report indicating a significant decline in regional manufacturing activity in December.
In commodity markets, crude oil prices dipped on Monday, reflecting concerns about future demand amid weak economic data from China and the looming threat of tariffs. Specifically, West Texas Intermediate crude oil futures for January fell by $0.58, settling at $70.71 per barrel. Locally, Hong Kong is set to release November's unemployment figures, following October's jobless rate of 3.1%.
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