Hong Kong Stocks Decline as Investors Evaluate Earnings and China Stimulus Plans

The State of Hong Kong Stocks

Hong Kong stocks retreated after three days of gains, as investors assessed corporate earnings and the prospect of further stimulus policies from China. The Hang Seng Index fell 0.2% to 19,658.27 as of 10am local time, following a 1.4% rise over the previous three days. The Hang Seng Tech Index dropped 0.3%. Meanwhile, China’s equity benchmarks saw similar declines; the CSI 300 Index slipped 0.3% and the Shanghai Composite Index eased 0.2%.

Corporate Earnings Impact

• Chow Tai Fook Jewellery Group fell 1.5% to HK$7.25 ahead of its earnings announcement next week.
• Longfor Group Holdings, a Chinese property developer, shed 1.4% to HK$11.20.
• China Resources Land lost 1.3% to HK$23.50.
• Conversely, Lenovo Group added 2.8% to HK$9.27, and China Hongqiao advanced 2.3% to HK$12.48.

Market Outlook

Investors are seeking fresh catalysts to revive stocks following fiscal measures from a recent legislative meeting that fell short of expectations, coupled with the looming threat of higher US tariffs. The Hang Seng Index has seen a decline of about 15% from this year's peak established in October.

Recent data shows that 35 companies on the Hang Seng Index have released quarterly results, reporting an average profit increase of just 0.1% from a year earlier, a significant decrease from the previous quarter's 7.3% profit growth.

In a related blow to the AI sector, Nvidia reported fourth-quarter revenue guidance that did not meet expectations, dampening sentiments in the global AI trade.

Asian markets exhibited mixed trends:

• Japan's Nikkei 225 slipped 0.7%
• Australia's S&P/ASX 200 remained largely unchanged
• South Korea’s Kospi rose 0.2%