Hang Seng Index Plummets as Global Growth Concerns and Fed Projections Weigh on Sentiment

The Hang Seng Index experienced a sharp correction on Thursday, erasing recent gains as a wave of selling hit the Hong Kong market. The index plummeted 551.19 points, or 2.23%, to close at 24,219.95, ending a four-day winning streak in which it had previously climbed nearly 4.6%. The downturn was driven by a combination of weak global leads and macroeconomic headwinds. Investors are increasingly cautious regarding the health of the global economy and the potential impact of tariffs, which weighed heavily on Asian bourses. This sentiment was mirrored in the U.S., where the S&P 500 and NASDAQ both closed slightly lower. The sell-off was widespread, particularly impacting the technology, financial, and property sectors. Major players saw significant declines, with Alibaba Group falling 3.97%, JD.com dropping 4.94%, and China Life Insurance plunging 5.89%. A few outliers managed to buck the trend, including CSPC Pharmaceutical, which rallied 2.57%, and CNOOC, which added 0.65%. Macroeconomic pressure intensified following the Federal Reserve's latest monetary policy announcement. While the Fed held interest rates steady, officials lowered their 2025 GDP growth projection to 1.7% from 2.1% and raised their consumer price growth forecast to 2.7% from 2.5%. In the commodities space, WTI crude futures rose 1.6% to close at $68.26 per barrel, spurred by new U.S. sanctions on Iran. Given the soft lead from Wall Street and prevailing economic anxiety, the Hong Kong market is expected to open lower on Friday.