Hong Kong stocks fell sharply on Friday in holiday-thinned trading, with technology shares leading the decline as investors awaited further clarity from a summit between U.S. President Donald Trump and Chinese President Xi Jinping, according to Reuters.
The benchmark Hang Seng Index fell 1.7% to 24,343.19, its lowest level in two months. The Hang Seng China Enterprises Index, which tracks mainland Chinese companies listed in Hong Kong, declined about 2%.
Technology stocks were among the biggest losers. The Hang Seng Tech Index fell more than 2% to a three-month low, while the artificial intelligence sector dropped nearly 3%.
Trading activity was subdued ahead of Hong Kong's Mid-Autumn Festival holiday. Financial markets in mainland China were closed on Friday and are scheduled to reopen on Monday.
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Investors await Trump-Xi signals
Market participants were closely watching the outcome of the Trump-Xi summit for indications on the future direction of U.S.-China relations and potential progress on key areas including trade, artificial intelligence, Taiwan and the Iran conflict.
The meeting was heavy on symbolism but did not appear to produce major breakthroughs on those issues. Investors were therefore assessing whether the summit could provide greater stability in relations between the world's two largest economies.
Analysts cited by Reuters said the absence of a major breakthrough had largely been anticipated, while the establishment of a more stable framework for U.S.-China relations could still be relevant for financial markets.
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Asian markets subdued
Elsewhere in the region, MSCI's broadest index of Asia-Pacific shares outside Japan was little changed.
Taiwan and South Korean markets were also closed for holidays, contributing to relatively subdued regional trading activity.
With several major Asian markets shut and mainland Chinese markets closed, investors were likely to focus on further details from the Trump-Xi meeting when broader regional trading resumes.
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