FX.co ★ Hong Kong Shares Ease from 4-1/2-Year Peak

On Thursday morning, Hong Kong's stock market saw a decline, with a decrease of 37 points or 0.1%, bringing the index to 27,789. This movement broke a six-day streak of gains and marked a pullback from a 4-1/2-year high. The downturn was influenced by a fall in U.S. futures after Federal Reserve Chair Powell highlighted ongoing inflation and robust growth, while not providing a clear timeline for potential rate cuts despite holding rates steady following three reductions in 2025. Additionally, investors exercised caution ahead of China's forthcoming official January PMI figures, expected this weekend, after positive performance in manufacturing and services at the end of 2025. The slide was predominantly driven by losses in technology and consumer sectors, with notable declines in companies such as Sands China (-6.9%), H World Group (-4.5%), China Resources Land (-2.8%), and Galaxy Entertainment (-2.2%). However, the market's dip was somewhat mitigated by signs of recovery in Hong Kong's property sector, where housing prices showed modest growth during 2025 after a four-year slump. Concurrently, the Hong Kong Monetary Authority maintained its base rate at 4.0%, mirroring the Federal Reserve's decision, in line with the city’s currency peg policy.