The Hang Seng fell 251 points, or 0.9%, to close at 26,459 on Wednesday, retreating from seven-week highs and reversing strong gains in the prior session as most sectors lagged. Profit-taking emerged ahead of China’s December CPI and PPI data later this week, while Hong Kong’s forex reserves for late 2025 are due today. Geopolitical risks also weighed after China banned exports of dual-use items to Japan, prompting Tokyo to call the move “absolutely unacceptable.” In the U.S., stock futures were mixed after record closes on the S&P 500 and Dow Jones Tuesday, ahead of a slew of data that could shape Fed policy. Still, losses were trimmed after the PBoC pledged to cut banks’ reserve requirement ratio and interest rates this year to support China’s economy. Meantime, mainland stocks hovered at their highest in over a decade, helped by stronger volumes and profit growth expectations. Major laggards included Tencent Music (-5.1%), Kuaishou Tech (-3.0%), Meituan (-2.2%), and SMIC (-2.0%).
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