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Hong Kong stocks sink on China data, drawing record ‘southbound’ fund flow

Bargain-hunting mainland investors buy a record HK$35.9 billion (US$4.59 billion) of Hong Kong stocks on Friday

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A worker inspects a production line at a factory of Jack Technology in Taizhou Bay, Taizhou City, east China’s Zhejiang Province, on July 17, 2025. Photo: Xinhua
Zhang Shidongin Shanghai
Hong Kong stocks posted the first back-to-back decline in two weeks on Friday after China’s July economic data fell short of estimates and a raft of disappointing earnings reports put investors in a risk-averse mood.

The Hang Seng Index fell 1 per cent to 25,270.07 at the close, extending a 0.4 per cent decline on Thursday but ending the week up 1.7 per cent. Mainland Chinese investors bought the dip, purchasing a record HK$35.9 billion (US$4.59 billion) of Hong Kong stocks through the exchange link programme for the day, according to bourse data.

The Hang Seng Tech Index dropped 0.6 per cent. On the mainland, the CSI 300 Index and the Shanghai Composite Index gained at least 0.7 per cent.

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E-commerce operator JD.com tumbled 3.4 per cent to HK$120.80 after second-quarter net income dropped 51 per cent from a year earlier, reflecting the fallout of a price war in the industry. CK Hutchison Holdings slid 1.1 per cent to HK$51.45 after posting a 92 per cent profit decline in the first half, largely because of one-off costs associated with the UK merger of mobile network operators Vodafone and Three. HSBC Holdings, the biggest weighting on the Hang Seng Index, fell 0.1 per cent to HK$100.30, and Alibaba Group Holding, the third largest, declined 3 per cent to HK$118.10.

China’s key economic data for July, released on Friday, missed analysts’ estimates, as the effect of trade-in programmes for household appliances wore off, the woes of the property market continued and some emerging industries were mired in overcapacity.

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Industrial production rose by 5.7 per cent from a year earlier in July, while retail sales grew by 3.7 per cent, according to the National Bureau of Statistics. The numbers fell short of the estimates of economists surveyed by Bloomberg, who expected increases of 6.8 per cent and 4.6 per cent, respectively. Expansion in fixed-asset investment in the first seven months of the year slowed to 1.6 per cent, versus the projection of 2.7 per cent growth.

A separate report released earlier also showed that a decline in property prices extended into July.

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