Hong Kong Stocks Slump as Stimulus Rally Fades, Japan's Nikkei Leads Asian Gains

Hong Kong stocks faced a sharp decline on Thursday as the recent rally driven by China’s stimulus efforts began to fade, per CNBC. The Hang Seng index dropped 3%, reversing some of Wednesday’s strong gains, with the Hang Seng Mainland Properties Index taking a major hit, dropping over 10%.

Notably, Longfor Group Holdings and New World Development saw significant losses. The decline followed earlier optimism fueled by support measures announced by Beijing, though future policy support remains uncertain.

In contrast, Japan’s Nikkei 225 gained 2.1%, boosted by a weakened yen. This comes after Japan's new prime minister suggested that the country’s economic conditions do not currently support another interest rate hike, following a meeting with the Bank of Japan governor.

Elsewhere, mainland China markets remain closed for the week-long holiday, and South Korea’s market was shut for National Foundation Day. Taiwan's markets were also closed due to Typhoon Krathon. Meanwhile, Australia’s S&P/ASX 200 saw a modest gain, with mixed economic data coming from the country.

In the Middle East, geopolitical tensions continued to impact global markets, with heightened focus on the ongoing conflict between Israel and Lebanon.

In the U.S., the major indices saw marginal gains overnight, with the S&P 500, Dow Jones, and Nasdaq barely rising as market participants remained cautious amid global uncertainties.