Hong Kong’s top share index has seen profit taking emerge after a strong run in January.
HK 50 – Daily Chart
The price of the HK 50 index pushed above the 27,402 high for 2 days, but it has now slumped to the 26,621 level. Some support is in place around 26,200 for the first test of the market’s resolve.
Hong Kong stocks have followed US stocks lower as investors show nerves over Donald Trump’s selection for the Federal Reserve. Tech stocks have also been affected by fears of high valuations.
A Standard Chartered Bank report noted a cautiously optimistic outlook for the Hong Kong economy, driven by financial services and private consumption. GDP growth is expected to come in at 3.5% for 2025, up from 2.6% in 2024. There are also projections for growth in cross-border spending and continued health in the IPO market.
“We maintain our 2026 GDP growth forecast at 2.5%, with global uncertainties posing risks to growth,” the bank’s analysts said.
“We are cautiously optimistic on the outlook for 2026. As a small and open economy, Hong Kong is susceptible to the global currents, including prevalent geopolitical risks, trade policy uncertainty, and the prospect of Fed rate moves”.
“That said, we expect financial services to remain a bright spot and private consumption to continue to recover, along with a steady labour market”.
The market has paused the recent downturn, but may take its cue from activity in the US after a heavy session of losses on Wall Street.
