​EBC Markets Briefing | HK stock strength is tested in July

The Hang Seng index dropped more than 1% on Thursday after Wall Street climbed overnight to a fresh peak. Trump announced that the US has struck a trade deal with Vietnam.

A seasonal lift for Asian equities in July may be hard to come by this year as macroeconomic concerns dampen sentiment, though the regional shares performed the second best this month on average.

Trump ruled out delaying the July 9 deadline for imposing higher levies on trading partners and renewed threats to hike tariffs on Japan. That saw Japanese shares leading losses in Asia early on Wednesday.

China's manufacturing activity contracted for a third straight month in June, an official survey showed, despite Beijing's stimulus efforts helping to stabilize certain aspects of the industrial sector.

Despite that sign of supply glut and sluggish consumer demand, Hong Kong is on track to regain its position as the world's top fundraising venue for initial public offerings in 2025, according to PwC.

The city's IPO market is red-hot so far this year, boosted by a string of blockbuster deals. It picks up listings that in previous years might have gone to New York amid rising geopolitical tensions.

The Hang Seng index has trended upwards, underpinned by its 50 EMA. But MACD divergence points to slight bearish bias, making the case for a push lower towards 27,760.

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