Hang Seng wraps up strong month despite Friday slump

The Hang Seng index slipped 284 points, or 1.2%, to close at 23,290 on Friday, retreating from the robust gains it posted during the previous trading session. The decline was largely triggered by a U.S. federal court’s decision to temporarily reinstate tariffs originally imposed by former President Donald Trump.

Hang Seng wraps up strong month despite Friday slump

This ruling overturned an earlier trade court judgment that had blocked these tariffs, reigniting investor concerns about escalating trade tensions between the world’s two largest economies. The renewed threat of tariffs weighed heavily on market sentiment, dampening risk appetite across key sectors. Adding to the cautious mood, investors awaited China’s official Purchasing Managers’ Index (PMI) for May, scheduled for release over the weekend. Market participants remained wary amid persistent worries about fragile factory activity and potential disruptions in the supply chain, reflecting ongoing uncertainties in China’s economic recovery. Meanwhile, comments from U.S. Treasury Secretary Janet Yellen further underscored the fragile state of trade negotiations. Yellen described talks with China as “a bit stalled” and suggested that progress might require direct intervention from top leaders, specifically U.S. President Joe Biden and Chinese President Xi Jinping, to break the impasse.

Most sectors experienced losses

Most sectors on the Hang Seng experienced losses, with technology and consumer stocks leading the downturn. The technology sector was hit particularly hard as investors reassessed growth prospects amid the tariff developments and potential regulatory headwinds. Consumer stocks also saw sharp declines amid worries about demand and rising costs. Auto manufacturers faced renewed pressure, extending their recent losses on fears that ongoing price wars would erode profitability. Notably, BYD shares dropped 3.6%, reflecting investor caution in the sector. Other significant decliners included logistics giant Orient Overseas, which plunged 6.9%, and power tool manufacturer Techtronic Industries, down 4.5%, both affected by broader market jitters and sector-specific challenges. Despite the day’s setback, the Hang Seng index managed to record a healthy gain of 5.3% for the month, supported by a surge in initial public offering (IPO) activity in Hong Kong. The city’s IPO market has been thriving, with over 150 companies reportedly preparing to list in the near term. Many of these listings are expected to raise upwards of $1 billion each, injecting fresh capital into the market and bolstering investor confidence. This IPO momentum remains a bright spot amid broader economic uncertainties, offering a potential catalyst for sustained market interest moving forward.