HK stocks canter up amid tech rebound for region

Asian stocks experienced an overall increase on Monday, as investors analyzed recent data that eased expectations for a US interest rate hike but also highlighted signs of weakness in the world's largest economy. Hong Kong's main Hang Seng Index closed at 25,453, marking a 1.3% gain, with a trading volume of HK$210.77 billion. Within the index, tech leaders Alibaba, Tencent, and JD.com contributed to the gains.

On the mainland Chinese market, the Shanghai Composite Index rose by 1.41%, finishing at 3,982 on a turnover of 1.11 trillion yuan. The Shenzhen Component Index gained nearly 2.44%, closing at 14,704 on a turnover of 1.275 trillion yuan, while the ChiNext Index increased by 3.14%, reaching 3,740 on a turnover of 629 billion yuan.

Semiconductor, agriculture, and precious metals-related shares led the market's rise, while sectors like liquor, gaming, and film and television faced the steepest declines. The South Korean bourse remained closed due to a public holiday, but Tokyo's Nikkei index rebounded from earlier losses, closing 506 points, or 0.74%, higher at 69,220.

US equities also benefited from the expectation that the Federal Reserve might refrain from raising interest rates next month, as recent economic reports indicated a slowdown in growth and easing inflation. However, data released on Friday raised concerns about the overall health of the economy, prompting warnings that traders should proceed cautiously.

Retail sales in the US declined by 0.6% month-over-month in July, the largest decrease in over a year, and consumer sentiment experienced a notable drop due to the impact of the US President Donald Trump's Iran conflict and households curbing spending. Payroll data, released at the beginning of the month, was followed by generally in-line inflation, weaker retail sales, and lower consumer sentiment, as explained by Fawad Razaqzada of Forex.com.

Taken together, these factors suggest that the US economic momentum might be weakening, heightening expectations that the Federal Reserve could maintain interest rates at their current level in September. Market observers have now adjusted their estimates, with only one in four traders believing a Fed rate hike would occur, compared to a 50:50 probability at the start of the week.

Asian investors remain optimistic at present, with tech companies particularly benefiting from the recent recovery following the July sell-off. Chipmaker Kioxia surged more than 15% in Tokyo, while SoftBank, Advantest, and Tokyo Electron experienced gains ranging from 1.6% to 2.6%. Despite Japan's economic growth falling short of expectations in the second quarter, there were no significant reactions to this data from Asian markets.