FX.co ★ Hang Seng Sinks to 3-Week Low on Mideast Tensions, Fed Signals

On Thursday, the Hang Seng Index fell by 473 points, equivalent to a 2.0% decline, ending the trading session at 23,238. This marks the index's third consecutive decline, bringing it closer to a three-week low amid widespread market downturns. Investor sentiment was negatively impacted by a steep drop in U.S. futures, triggered by reports that senior U.S. officials are preparing for a possible military strike on Iran, heightening concerns over potential U.S. involvement in the Israel-Iran conflict. Geopolitical uncertainty was exacerbated by persistent tariff worries, as Federal Reserve Chair Jerome Powell warned that inflation risks remain "meaningful." Although market expectations still point to two interest rate cuts in 2025, the central bank has indicated a reduced pace of cuts for the upcoming year. Investors exercised caution ahead of the People's Bank of China's forthcoming decision on key lending rates, following its record-low rate cut in May. Losses on the index were somewhat mitigated by the anticipation that China's top legislative body could propose new stimulus measures during its early July session. The largest decliners were Pop Mart (-5.7%), JD Health (-5.0%), Trip.com (-4.1%), and Meituan (-3.8%).