FX.co ★ Hong Kong Stocks Drop Sharply After Trade Data

Hong Kong's stock market experienced a downturn on Tuesday, with the Hang Seng Index dropping 282 points, or 1.1%, to settle at 25,277 during early trading. This decline reversed gains from the previous day as sell-offs occurred across all sectors. This shift in investor sentiment was largely due to disappointing trade figures for June, which showed a slowdown in both exports and imports as global and local demand weakened amidst rising trade tensions. Additionally, some traders chose to lock in profits after the Hang Seng nearly reached four-year highs, influenced by Wall Street's lackluster closing. Market participants remained cautious ahead of significant U.S. events, such as the Federal Reserve's upcoming interest rate decision and some key inflation data releases. In China, anticipation surrounds the forthcoming July PMI data, along with a private sector survey. Despite these downturns, losses were somewhat mitigated by optimism surrounding U.S.-China trade discussions in Stockholm, which could potentially extend the tariff truce by 90 days and set the stage for a possible meeting between President Trump and Xi Jinping later this year. On the performance front, notable decliners included ZTO Express, shedding 3.9%, KE Holdings, down 3.6%, Xiaomi Corp., off 2.4%, and China Tower, which fell 2.1%.