Hong Kong equities slumped 662 points, or 2.6%, to 25,098 in Wednesday morning trade, logging a third consecutive decline and moving close to an 11-week low. Sentiment was hit hard by a sharp fall in U.S. stock futures, as mounting fears of a broader Middle East conflict raised the risk of an energy shock, higher inflation, and a delay in interest rate cuts.
On the mainland, Chinese shares dropped to a two-week low after February’s official PMI pointed to weakness in both manufacturing and services during the extended Lunar New Year holiday, in contrast to more upbeat readings from private surveys.
Losses in Hong Kong were partially cushioned by fresh data showing the city’s private sector expanded in February at its fastest pace in nearly three years, despite fierce competition. Investor optimism also picked up on expectations that this week’s parliamentary meetings in Beijing could yield new policy support measures.
All local sectors finished sharply lower, with financials (-2.7%) and technology (-1.5%) leading the declines. Among the major laggards were AIA Group (-4.6%), Wuxi Biologics (-4.3%), CK Hutchison (-3.6%), and Techtronic Industries (-2.8%).
