FX.co ★ Hong Kong Stocks Retreat But Set for Solid Yearly Advance

Hong Kong's stock market experienced a decline early on Wednesday, with shares dropping by 207 points, or 0.8%, to 25,648 in the final trading session of 2025. This downtrend mirrored Wall Street's S&P 500, which saw its third consecutive drop the previous night following the latest Federal Reserve minutes. These minutes revealed differences of opinion on how to balance support for the labor market against the risk of rising inflation. However, the losses were mitigated by positive data regarding China's Purchasing Managers Index (PMI) for December, which showed a slight increase in manufacturing activity according to both official and private reports. Official statistics also indicated the strongest growth in the services sector in four months, which exceeded expectations. Key stocks that performed poorly included Innovent Biologics, Techtronic Industries, and Meituan, with declines of 3.2%, 2.2%, and 1.2% respectively. Despite the day's drop, Hong Kong's markets are poised to achieve a second year of strong gains, having risen approximately 28% so far. This upward trajectory is supported by a vibrant IPO market within the city, diminishing trade tensions between the U.S. and China, and Beijing's commitment to fostering economic growth through proactive fiscal measures and accommodating monetary policy. Trading will end early for New Year's Eve and will resume on January 2.