FX.co ★ Market Slips in Hong Kong But Monthly Rally Intact

Hong Kong stocks fell sharply by 365 points, or 1.6%, to 23,211 during Friday's morning session, erasing the gains achieved the previous day due to weakness in U.S. futures. Growing concerns over a decelerating U.S. economy, inflation risks, and uncertainties related to potential judicial developments from President Trump's tariff decisions weighed heavily on investor sentiment. An air of caution prevailed among traders ahead of China's official May Purchasing Managers' Index (PMI) data, expected over the weekend. There are persistent worries about sluggish factory activity despite Beijing's ongoing stimulus efforts. Nevertheless, the Hang Seng Index is poised for a robust monthly gain of approximately 5%, rebounding from significant losses in the preceding period. This recovery is bolstered by Hong Kong's strong first-quarter GDP figures, a 90-day truce in U.S.-China tariff conflicts, vibrant IPO activity, and a resurgence in tourism. Despite these positive indicators, major sectors faced downward pressure, with technology, consumer, and financial stocks taking the brunt of the losses. Among the significant decliners were Orient Overseas, dropping 6.0%, Sunny Optical down 4.6%, Kingsoft Corp. falling 4.3%, and BYD Electronic decreasing by 4.1%.