Hang Seng slips further but surges 2% for the week

The Hang Seng dropped 108 points or 0.5% to end at 23,345 on Friday, marking its second consecutive day of losses amid broad-based declines across all sectors.

Hang Seng slips further but surges 2% for the week

Persistent uncertainty over how trade and economic policies will evolve after the 90-day truce between Washington and Beijing ends in July kept investors on the defensive, with many opting to lock in profits following recent gains. While a climb in US futures offered some early support, it ultimately failed to lift sentiment, as traders remained cautious ahead of China’s key April economic data next week, which will include industrial output, retail sales, and fixed asset investment—metrics widely seen as gauges of the health of both domestic demand and manufacturing activity. At the same time, attention is turning to the People’s Bank of China, which is set to review its benchmark lending rates. These rates have been anchored at record lows in recent months, as the central bank seeks to counterbalance both internal headwinds—such as a softening property market and weak consumer confidence—and external challenges linked to the global trade environment. Investors are closely watching whether the PBoC will maintain its current policy stance or introduce additional targeted easing measures to support credit growth, particularly to small businesses and the hard-hit manufacturing sector. Despite Friday’s losses, the Hang Seng still managed to notch a 2% gain for the week, marking its fifth straight weekly advance and the longest winning streak since February. The index was buoyed earlier in the week by upward revisions to China’s growth forecasts from several major global investment banks, amid expectations of continued front-loading of exports to the US ahead of the potential re-escalation of tariffs. Some optimism also stemmed from improving sentiment in the mainland’s A-share market, where tech and consumer stocks have outperformed.

Corporate earnings disappointed

Nevertheless, market mood soured toward the end of the week as corporate earnings disappointed. Alibaba slid 3.9% after posting weaker-than-expected revenue, raising concerns about the pace of recovery in consumer spending and the lingering effects of regulatory tightening on tech firms. Other notable decliners included Hang Seng Bank (-3.3%), which extended losses amid concerns about the margin pressures from prolonged low interest rates; Swire Pacific (-3.2%), hit by ongoing weakness in the aviation and property sectors; and Meituan (-3.1%), as investors digested softer guidance amid rising competition in food delivery and local services. Looking ahead, traders remain wary of headline risks, including further developments in US-China trade talks, the Federal Reserve’s evolving rate outlook, and geopolitical tensions in the Middle East that could impact global energy markets. Analysts cautioned that while the Hang Seng’s recent rally has been impressive, the sustainability of gains will depend heavily on next week’s China data and signals from the PBoC regarding the future policy direction.