On Tuesday, the Hang Seng Index fell by 305 points, or 1.2%, settling at 25,525, after enjoying a two-day upward trend. This downturn was driven by widespread declines, as sentiments weakened following a sharp drop in U.S. futures. Contributing to the market's unease were U.S. President Trump's decisions to dismiss Fed Governor Lisa Cook and his threats to impose "200% tariffs" on China if restrictions on rare-earth magnet exports are enacted. Additionally, Trump threatened retaliatory measures against countries imposing regulations on U.S. Big Tech firms.
The Hang Seng pulled back from its nearly four-year peak amid growing concerns that the momentum propelling mainland stocks—including those that have pushed the Shanghai Composite to its highest in a decade—might be waning. Nevertheless, the market found some support thanks to several positive factors: optimism about artificial intelligence developments, favorable market valuations in China and Hong Kong, Beijing’s continued policy support, and high liquidity spurred by low bank returns.
Among the notable market movements, Haidilao saw a 2.8% drop after its first-half earnings fell short of expectations, while Innovent Biologics declined by 4.1%, China Unicom by 3.6%, SMIC by 3.3%, and Dongfeng Motor by 1.7%.
