Shares in Hong Kong plunged 309 points or 1.3% to 23,415 on the last trading day of February, marking a second session of losses. Sentiment deteriorated as the US will impose an additional 10% tariff on Chinese imports on March 4 while moving forward with 25% levies on products from Canada and Mexico. The Hang Seng fell further from its highest in over three years, hit earlier in the week, and was on track for its first weekly drop in seven, with all sectors suffering sharp losses.

The tech index tumbled over 2.5% as an AI-driven rally lost steam after Nvidia's underwhelming earnings results. Horizon Robotics led losses with an 8.2% drop, followed by Longfor Group (-4.1%), Geely Auto (-3.4%), and Sunny Optical Tech (-2.8%). Still, markets were on course for solid monthly gains, up around 15% so far, marking a third month of rises as hopes mounted that China's 2025 Two Sessions meeting next week will outline key policy priorities, including potential support measures for the economy.

On the final trading day of February, Hong Kong's stock market exhibited weakness, with the Hang Seng Index opening down by 102 points, or 0.43%, at 23,616 points. The National Enterprises Index fell by 21 points, or 0.25%, to settle at 8,712 points, while the Technology Index decreased by 18 points, or 0.3%, to 5,862 points.

Technology stocks generally trended downward, although Xiaomi Group managed to rise by 4.9% following its recent press conference. In contrast, Tencent declined by 0.5%, Alibaba dropped by 1.5%, Meituan fell by 1.7%, JD.com decreased by 1.3%, and Kuaishou slipped by 0.5%.

Financial stocks also showed a soft performance, with HSBC Holdings down by 0.1%, AIA Insurance falling by 0.4%, China Ping An decreasing by 0.8%, and Hong Kong Exchanges and Clearing dropping by 2.2%. However, Yum China saw a positive response, rising by 1% after its earnings report.
The Shanghai Composite fell 0.6% to below 3,370 while the Shenzhen Component dropped 1% to 10,820 on Friday, with both benchmarks set to end the week lower as US President Donald Trump imposed an additional 10% tariff on imports from China, set to take effect on March 4. Trump also confirmed that his proposed 25% tariffs on Mexico and Canada would proceed next week. The escalating tariffs are expected to significantly impact China's economy, which relies heavily on exports and free trade. Investor sentiment was further dampened as the market braced for next week's "Two Sessions," where the Chinese government will unveil its policy plans for the year ahead. A key focus will be on the details of fiscal stimulus measures aimed at supporting economic growth. Technology and AI-related stocks led the declines, with sharp losses from Cambricon Technologies (-7.3%), Eoptolink Technology (-7.6%), and Hygon Information Technology (-5.3%).

Source: Trading Economi