FX.co ★ Hong Kong Shares Slip But Head for Solid Weekly Gains

Hong Kong's stock market experienced a downturn on Friday morning, with a decline of 223 points, or 0.8%, bringing the index to 27,067. This decline ended a three-day streak of gains and retreated from a peak not seen in four years. The sell-off affected all sectors as investors cashed in on profits amid growing concerns over the U.S. government shutdown, which entered its second day on Thursday. The market anticipates that the shutdown could extend into the next week, potentially delaying the release of critical economic data, including the monthly employment report. Meanwhile, mainland Chinese markets remained closed in observance of Golden Week. Among the significant stocks that fell were electric vehicle companies like XPeng, which dropped by 4.4%, Li Auto, down 3.7%, and Geely Auto, which slid 1.7%. In addition, Kuaishou Technology decreased by 4.1%, Mixue Group by 3.0%, and Zhaojin Mining Industry by 2.1%. Despite the setback on Friday, the markets are on track for a strong weekly performance, with an approximate gain of 3.7%, bolstered by record-setting highs on Wall Street, optimism for more Federal Reserve rate reductions, and the People's Bank of China's commitment to aligning fiscal policies to stimulate economic growth in China. In economic data, Hong Kong's retail sales increased by 3.2% year-over-year in August, marking the most significant growth since December 2023.