Hang Seng Index slips despite regional tech optimism
Mainland stocks ended lower on Thursday as early gains in co-packaged optics shares lost momentum and failed to offset losses in metal stocks. In Hong Kong, the benchmark Hang Seng Index ended 43 points, or 0.2 percent, down at 25,396 on turnover of HK$263.71 billion. The tech index rose 15 points, or 0.3 percent, to 4,792 while the China enterprises index fell 19 points, or 0.2 percent, to…
The Hang Seng Index, a key Hong Kong market indicator, experienced a slight decline on Thursday despite optimism surrounding regional technology stocks. The index closed at 25,396 points, marking a 0.2 percent decrease from the previous trading session. This downturn was primarily driven by losses in metal stocks, which offset early gains seen in optics shares.
The tech index, on the other hand, managed a 0.3 percent increase, reaching 4,792 points. Conversely, the China enterprises index saw a 0.2 percent drop, settling at 8,426 points. Materials shares, however, suffered a significant 5.4 percent decline, with China Gold International Resources witnessing a sharp 8.43 percent drop. Additionally, Tencent Holdings faced a 4.5 percent decrease, hitting a two-week low after reporting a record quarterly negative free cash flow and increasing investments in AI technology.
Analysts from UBS expressed concern that stagnant consumption trends might hinder ad-load expansion and revenue growth, while the extended AI investments might yield returns over a more extended period. On the mainland, the Shanghai Composite Index fell 19 points, or 0.5 percent, to 3,926, while the Shenzhen Component Index slipped 125 points, or 0.87 percent, to 14,289.
The ChiNext Index also dipped 16 points, or 0.45 percent, to 3,586. Despite these setbacks, TFC Optical Communication, an optical module leader, surged by as much as 13 percent following upbeat forecasts from US-listed CoreWeave and Super Micro Computer, indicating a surge in demand for AI computing capacity. The broader 5G Communication Index showed mixed results, ending the day nearly unchanged after a morning rise.
The index had been up nearly 14 percent this month following a recent sell-off. Mainland memory chip giant CXMT experienced a 1.2 percent decline. In mainland financial shares, investors remained relatively optimistic as China's central bank maintained a loose monetary stance and pledged to implement effective measures, although they refrained from signaling explicit rate cuts or adjustments to the reserve-requirement ratio.
In Tokyo, the Nikkei surged 1.16 percent, closing at 68,308, while the Topix hit a record high of 4,176, both driven by chip-related stocks and positive outlooks for local firms. In Seoul, the Kospi ended the day up 3.56 percent, hitting its highest level in three weeks, buoyed by a rise in chipmakers.
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