The Hang Seng Index extended its losses from the previous week, falling 3.52% in the week ended January 10. Rising tensions between the US and China, weak economic data and an aggressive Fed led to the biggest weekly decline since November. Real estate and technology stocks led the declines.
The Hang Seng Mainland Properties Index fell 3.22%, while the Hang Seng Tech Index fell 3.23%. Key driver Tencent (0700), which plunged 10.41% as investors reacted to its inclusion on the Section 1260H list. Baidu (9888) and Alibaba (9988) lost 4.13% and 3.63% respectively.
Mainland Chinese stock markets also ended the week on a negative note. The CSI 300 and Shanghai Composite fell 1.13% and 1.34%, respectively.
Mixed performance in commodity markets
Commodities had a mixed week ending January 10. Gold ended the week up 1.87% to $2,688. The US Jobs Report briefly tested buyer demand. However, FOMC member Austan Goolsbee downplayed the impact of the Jobs Report on the Fed’s rate path, leading to a positive end to the week. Crude oil advanced on supply concerns.
Meanwhile, the iron ore market closed at $766 on Friday, down 0.02% for the week. Concerns about oversupply due to the slowing Chinese economy left iron ore in the red.
ASX 200 Advances on RBA Rate Cut Bets
Australia’s ASX 200 rose 0.53% in the week ending January 10. Growing bets on an RBA rate cut in February boosted demand for rate-sensitive Australian shares.
This week, ANZ (ANZ) predicted the RBA would cut cash rates on February 18, in line with the Commonwealth Bank of Australia (CBA). Underlying inflation fell to 3.2% in November from 3.5% in October, prompting bets on a policy maneuver in February.
Northern Star Resources Ltd. (NST) rose 5.14% on rising gold prices, while the S&P/ASX 200 All Technology Index gained 0.45% for the week.
Meanwhile, Fortescue Metals Group (FMG) and BHP Group Ltd fell. (BHP) this week by 2.61% and 0.20% as the outlook for iron ore demand remained bleak.
Nikkei index drops due to uncertainty at the BoJ
In the week ending January 10, the Nikkei index fell 0.30%. Uncertainty about the Bank of Japan’s upcoming monetary policy decision and a more aggressive Fed weighed on this. However, a weaker Japanese yen offset the downtrend as the USD/JPY pair rose 0.27% for the week to 157.692.
It is striking that Fast Retailing Co. Ltd. (9983) ended the week with a loss of 9.51%, after announcing declining profits from China. In contrast, Tokyo Electron (8035) rose 11.74% on optimistic demand sentiment.
Outlook: Stimulus and tariff developments in focus
With policy decisions on the horizon, markets remain primed for sharp reactions: stay ahead.
Key developments this week include US inflation data, Chinese trade and GDP figures, and future central bank guidance. However, rising geopolitical tensions and hawkish central bank commentary could weigh on sentiment, while targeted Chinese stimulus and declining US inflation could trigger a market recovery.
Traders must keep a close eye on global economic trends and trade dynamics to navigate changing market conditions. For an in-depth analysis of the Hang Seng Index and global market trends, click here.