Nation

Hong Kong Stocks Take a Dive Amid Mixed Signals

2025-07-03

Author: Jessica Wong

In a startling turn of events, Hong Kong's stock market plunged by 257 points, or 1.1%, dropping to 23,963 early Thursday. This downturn swiftly reversed gains made in the previous session as traders reacted to disappointing data emerging from mainland China.

A recent private survey revealed that China’s services sector grew at its slowest pace in nine months during June, casting a shadow on market optimism.

Adding to the market's woes was the anticipation of a crucial U.S. jobs report later in the day. Investors are on edge due to ongoing uncertainty surrounding a pivotal U.S. tax cut and spending bill, accompanied by an impending tariff deadline on July 9 that President Trump has refused to extend.

As if that wasn’t enough, U.S. futures dipped slightly after the S&P 500 and Nasdaq reached new highs in response to Trump's recent trade deal with Vietnam.

Despite the gloomy overall sentiment, Hong Kong's losses were partially offset by local data which indicated retail sales had finally turned a corner, rising by 1.9% year-on-year in May—breaking a streak of 14 months of decline.

Eyes are now set on China's upcoming Politburo meeting, where investors are hopeful that the government might unveil additional economic stimulus.

However, notable laggards in the market included Huishang Bank, which saw an 8.6% drop, followed by Kingsoft (-5.7%), Xiaomi (-3.0%), and Alibaba Health (-2.4%), hinting that investor confidence remains shaky.