In early trading on Wednesday, Hong Kong's stock market experienced a decline, with the index dropping 137 points, or 0.5%, to settle at 25,295. This downturn marked a continuation of losses for the third consecutive session, taking the market to its lowest point in two weeks, amidst widespread declines. Investor sentiment was negatively influenced by weak performances on Wall Street, where both the S&P 500 and Dow Jones retreated in the previous session. Market participants are anticipating a 25 basis points reduction in the Federal Reserve's interest rate later today, however, they expect the accompanying guidance to be hawkish, with minimal likelihood of another rate cut in January.
Additional pressure emerged from the mainland markets following new data indicating a steeper decline in China’s producer prices for November, emphasizing the limited progress in mitigating aggressive price competition. In a somewhat contrasting development, consumer prices dipped by 0.1% on a month-on-month basis, marking the first drop in five months, although the annual rate climbed to 0.7%.
Nevertheless, the downturn was somewhat mitigated by indications from China’s Politburo regarding plans to implement more proactive fiscal measures and a suitably loose monetary policy. Key stocks that saw early declines included Akeso, which fell by 2.7%, Tencent Music down by 2.1%, Nongfu Spring decreasing by 1.8%, and SMIC which declined by 1.7%.
