Tech Shares Drag Hong Kong Stocks Amid Pre-Holiday Lull

Hong Kong stocks took a hit on Wednesday, with technology shares leading the losses in subdued trading as Chinese markets prepared to reopen after the National Day holiday. The Hang Seng Index dropped 0.5%, marking a third consecutive session of decline, following its four-year peak on October 2. The market had remained closed on Tuesday.

Amid a global tilt towards less risky investments, Asian stocks also fell by 0.6% after a lethargic session in the United States. Gold prices surged to a new pinnacle of $4,000 per ounce as investors sought refuge in the precious metal. The Hang Seng Tech Index saw a drop of 0.6%, and the AI sector index slipped 0.8%.

This downturn in the Hong Kong market comes in the wake of reports suggesting that U.S. lawmakers are advocating for broader bans on the sale of chipmaking tools to China. Major players like Alibaba and Baidu saw declines of 1.6% and 3%, respectively. Additionally, mainland developers decreased by 1.3%, with Longfor losing 4.5%. The market sentiment, characterized as 'mixed and cautious,' stayed on edge ahead of a crucial Communist Party meeting expected to shape China's socio-economic roadmap for the next five years. As Chinese financial markets are set to resume trading after an eight-day hiatus, investors are keeping a close watch.

(With inputs from agencies.)