The political deadlock in Washington has shaken the Hong Kong stock market. The Hang Seng Index fell 0.6% this morning to 26,976.92, driven by concerns about the US government shutdown, which has triggered a flight to safe havens like gold. The pressure was even deeper in the technology sector, with Hang Seng Tech falling 1.5%. Major stocks like SMIC, Kuaishou, Li Auto, and BYD all fell by more than 3%.

On the other hand, safe haven stocks shone. Zijin Mining, a giant gold miner, jumped 4% as gold continued to be sought amid US uncertainty. Tencent and Meituan also managed to gain some ground, albeit slightly. Investors are tending to wait and see as key US economic data, such as payrolls, has been delayed due to the shutdown, exacerbating the uncertainty surrounding the Fed's monetary policy outlook.

The market is now increasingly confident that an interest rate cut could come later this month, but the uncertainty has made gold even more attractive. The precious metal nearly hit its highest record this year, driven by political turmoil, the potential for a weakening US economy, and global central banks' diversification away from the dollar.

Elsewhere in the region, Asian indices tended to be positive: Japan's Nikkei 225 surged 4.4% on pro-stimulus sentiment, South Korea's Kospi rose 2.7%, and Australia's S&P/ASX 200 edged up 0.1%. But with Hong Kong trading closed on Tuesday and mainland China remaining closed until Wednesday, investors are likely to remain cautious, awaiting a clearer global direction.

Source: Newsmaker.id