Hang Seng Index Eyes Potential Recovery Following Two-Day Decline

The Hong Kong stock market has experienced a downturn over the past two trading sessions, falling nearly 800 points, or 3.1 percent. The Hang Seng Index is currently hovering just above the 25,250 level, though analysts expect to see support emerge this Friday.

The outlook for Asian markets remains largely positive, driven by declining oil prices and growing optimism regarding a cessation of hostilities in the Middle East. Following gains in European markets and a generally positive trend in U.S. equities, Asian markets are anticipated to trend upward.

On Thursday, the Hang Seng finished sharply lower, pressured by losses in the financial, property, and technology sectors. The index declined by 379.81 points, or 1.48 percent, closing at 25,253.40, after fluctuating between 25,188.02 and 25,499.09.

Notable losers included AIA, which fell 6.75%, and Lenovo Group, which plummeted 4.36%. Other significant declines were seen in Zijin Mining (-2.69%), Alibaba Group (-2.45%), Meituan (-2.24%), and the Hong Kong Exchange (-2.10%). Baidu dropped 2.11%, and WuXi AppTec slipped 1.91%. Semiconductor Manufacturing retreated 1.75%, while Tencent Holdings declined 1.59%. Other losses were recorded by PetroChina (-1.31%), Ping An Insurance (-1.30%), and Nongfu Spring (-1.15%). Minor dips were seen in China Mobile (-0.94%), CNOOC (-0.88%), BOC Hong Kong (-0.80%), and Xiaomi Corporation (-0.70%). In contrast, CITIC climbed 1.39%, and Industrial and Commercial Bank of China remained unchanged.

Wall Street provided a cautiously optimistic lead; major averages opened mixed on Thursday and trended higher throughout the session, though they finished with diverging results.

The Dow Jones Industrial Average surged 874.86 points, or 1.73 percent, hitting a record close of 51,561.93. The S&P 500 added 30.63 points, or 0.41 percent, to finish at 7,584.31, while the NASDAQ dipped slightly by 23.02 points, or 0.09 percent, closing at 26,830.96.

The Dow’s rally was fueled by a surge in UnitedHealth (UNH) shares following a Bank of America upgrade, alongside strong gains from American Express (AXP), Goldman Sachs (GS), and Merck (MRK).

While the NASDAQ recovered significantly from its intraday lows, it still ended the day slightly lower due to pressure in the technology sector. Broadcom (AVGO) saw a steep drop after failing to raise its full-year AI chip sales forecast of $100 billion, despite reporting second-quarter earnings that beat expectations.

Commodity markets also reacted to geopolitical shifts, as crude oil prices plunged following an Israel-Lebanon ceasefire announcement. West Texas Intermediate crude for July delivery fell by $3.00, or 3.12 percent, to trade at $93.02 per barrel.

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