FX.co ★ Hong Kong Stocks Fall on Geopolitical Jitters

On Monday morning, the Hong Kong stock market experienced a decline of 94 points or 0.4% to 23,431, erasing gains made in the previous session. This downturn was driven by a significant drop in U.S. futures amid growing tensions in the Middle East. Following U.S. strikes on Iranian nuclear facilities, the U.S. State Department issued a 'worldwide caution' alert, as Tehran promised retaliation. Investors remained cautious, particularly after China's foreign direct investment (FDI) figures revealed a 13.2% decrease year-on-year for the first five months of 2025, despite notable growth in the high-tech sector. Nonetheless, more significant losses were prevented by a substantial increase in Hong Kong's current account surplus, which grew to HKD 125.2 billion in the first quarter of 2025, up from HKD 95.3 billion the previous year. Additionally, the city's annual inflation rate decreased to 1.9% in May, down from April's three-month peak of 2%. Consumer and technology stocks were the main contributors to the market's decline, while financial stocks remained largely unchanged. Among the early decliners were China Longyuan Power, which fell by 3.5%, Techtronic Industries, down by 2.5%, and Tencent Holdings, which decreased by 1.6%.