The Hang Seng Index fell 385 points, or 1.4%, to close at 26,381 on Thursday, reversing gains from the previous session. The decline followed a notable drop in U.S. futures after Nvidia’s earnings underwhelmed market expectations and as geopolitical tensions between the U.S. and Iran persisted.
Mainland Chinese equities were also subdued, with investors turning cautious ahead of China’s annual legislative meetings in March. However, losses in Hong Kong were limited by the territory’s 2027 budget outlook, which forecasts the first fiscal surplus in four years, driven by higher profits tax and stamp duty revenues. Sentiment was further supported by Shanghai’s decision to ease home purchase restrictions for non-residents.
Sector-wise, technology and consumer stocks each shed more than 2%, while declines in financial and property shares were more moderate ahead of February PMI data due next week. Galaxy Entertainment lost 3.9% despite expectations of stronger 2025 profits, while Kuaishou Technology (-3.8%), Pop Mart International (-3.4%), and Meituan (-2.6%) also underperformed. In contrast, Hong Kong Exchanges and Clearing (HKEX) gained 0.5% after reporting higher fourth-quarter profit and revenue, supported by robust listing and trading activity.
