Market Downturn in Hong Kong: What Happened?

Hong Kong's stock market took a hit on Friday, plunging 144 points or 0.6% to 24,936, ending a four-day winning streak as widespread losses affected various sectors.

Caution Before Key Economic Data

Investors are on edge, awaiting crucial July Consumer Price Index (CPI) and Producer Price Index (PPI) data from China scheduled for release this Saturday. Analysts predict a slight dip in consumer prices, while ongoing trade tensions could lead to sustained deflation among producers.

Currency Reserves Hit a Low

In local news, Hong Kong's foreign exchange reserves have fallen to a three-month low of USD 425.4 billion as of July, raising concerns among traders about the region's economic stability.

Notable Losses Among Major Stocks

The semiconductor sector took a significant hit, with Semiconductor Manufacturing plummeting 4.7% after missing earnings expectations for Q2. Other notable losers included MGM China down 4.3%, Kingdee International Software down 4.2%, and SITC International down by 2.5%.

Positive Outlook Amidst the Downturn

Despite the day's losses, the Hang Seng Index is on track for a weekly gain of approximately 1.8%, recovering from a hefty 3.5% drop last week. Earlier in the week, excitement surged when U.S. President Trump suggested that a trade deal with China may be imminent, hinting at a potential meeting with President Xi by year's end if negotiations progress positively.

Better-Than-Expected Trade Data Boosts Sentiment

Adding to the optimism, China's July trade data exceeded analysts' predictions, providing a glimmer of hope in a globally uncertain economic environment.