The Hang Seng Index fell 33 points, or 0.14%, to close at 22,944 on Wednesday, retreating after a strong rally in the previous session.
Hang Seng finishes slightly lower
The decline was driven by profit-taking in major technology stocks, pulling the market back from a four-month high. Investor sentiment took a hit after U.S. President Donald Trump confirmed plans to impose 25% tariffs on automobile, pharmaceutical, and semiconductor imports within weeks, raising concerns about the potential impact on Chinese manufacturers and exporters.
Adding to the cautious mood, doubts resurfaced over the sustainability of the recent surge in Chinese equities, despite Beijing’s more supportive stance toward the tech sector and private enterprises. While authorities have introduced measures to stimulate economic growth and revitalize key industries, some investors remain wary of underlying structural challenges and ongoing regulatory uncertainties.
Biggest losers
Losses in the session were led by consumer and financial stocks, with notable declines in Hang Seng Bank (-4.0%), Meituan (-3.2%), and JD Logistics (-1.4%). The broader property and technology sectors also remained subdued. However, the downside was limited by better-than-expected real estate data, as China’s new home prices saw their smallest decline in six months in January, signaling that efforts to stabilize the property sector may be gaining traction.
SMIC outperformed the market
One of the standout performers of the day was Semiconductor Manufacturing International Corporation (SMIC), which surged 7.7% to close at a record high, driven by optimism surrounding domestic chip production and government support for the semiconductor industry. Investors are now turning their attention to China’s key lending rate decision from the People's Bank of China (PBoC) in the coming days, looking for further clues on monetary policy direction and potential stimulus measures.
