FX.co ★ U.S.–Europe Tensions, China Growth Worries Drag Hang Seng Lower

On Monday, the Hang Seng Index dropped 281 points, or 1.0%, closing at 26,564, marking its third consecutive session of losses as investor sentiment weakened due to widespread declines. The pressure intensified following a plunge in U.S. futures, provoked by President Trump's threat to impose tariffs on several European countries. The tariffs are set to begin at 10% on February 1, escalating to 25% by June 1, should these nations resist his attempt to purchase Greenland. This move was widely criticized by major EU members who labeled it as coercive, with France considering unprecedented countermeasures in response. In China, the Q4 GDP growth decelerated to its lowest in three years due to weak domestic demand. Despite achieving Beijing’s 5% annual growth target, ongoing trade tensions and structural challenges continue to overshadow the economic outlook. Technology stocks led the declines, with SMIC falling 2.7%, Kuaishou decreasing by 2.2%, and Xiaomi dropping 1.6%. Pharmaceutical stocks also suffered, with Sino Biopharmaceuticals plunging 6.0%, Hansoh declining 4.1%, and Akeso falling 3.3%. Investors are now focused on the People’s Bank of China's decision regarding the loan prime rate on Tuesday, following the maintenance of key lending rates at historic lows for a seventh consecutive month in December.