Hong Kong Stocks Hit Two-Week Low as Wall Street Declines

According to TradingEconomics, Hong Kong stocks declined by approximately 137 points or 0.5% at the start of trading on Wednesday, reaching 25,295 points, continuing losses for the third session in a row and marking the lowest level in two weeks, amid broad declines across most sectors.

The biggest pressure came from Wall Street after the S&P 500 and Dow Jones indexes fell in yesterday's session, as investors anticipate the Federal Reserve will announce a 25 basis point rate cut later today. However, hawkish guidance reduces the likelihood of another cut in January, negatively affecting risk appetite in Asian markets.

The pressure increased following new data from China showing a deeper decline in producer prices in November, reflecting weak progress in the government's efforts to curb intense price competition. Consumer prices also recorded a monthly decline of 0.1% - the first drop in five months - although the annual inflation rate rose to 0.7%, indicating contrasting price drivers in the world’s second-largest economy.

Nevertheless, limited positive signals from the Politburo meeting - confirming a shift toward a more active fiscal policy and an accommodative monetary policy - helped to mitigate losses and prevent a deeper decline in the index.

Early declines were led by major companies including:

• Akeso (-2.7%)
• Tencent Music (-2.1%)
• Nongfu Spring (-1.8%)
• SMIC (-1.7%)

These movements reflect a mix of local and external pressures, while investors await the Fed's decision and its implications for capital flows in Asian markets.