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Forex Market Rally Regains Momentum Amid Recovery from Recent Selloff on February 26, 2025

Forex Today: Markets Stabilise After Selloff – 26 February 2025

Yesterday, global markets experienced a rollercoaster ride, with risk-off sentiment gripping investors, resulting in a sharp sell-off. However, today, the Hong Kong stock market led the way to recovery, surging to a 3-year high, while the US indices, commodities, and Bitcoin took a hit. Meanwhile, geopolitics continued to dominate headlines, with Trump’s moves on copper tariffs and Russia sanctions causing a stir.

Hong Kong Stock Market Rebounds

After a tumultuous day, the Hong Kong stock market showed remarkable resilience, ending the session with a strong gain and a new 3-year high. The Hang Seng Index climbed 2.2% to 29,416, as investors rotated back into risk assets. Analysts attributed the rebound to a combination of factors, including a repricing of markets, a shift in investor sentiment, and a pickup in earnings growth.

The rally was broad-based, with Technology, Finance, and Healthcare stocks leading the charge. Several heavyweight stocks, such as HSBC Holdings and Bank of China, posted significant gains, as did technology giant Tencent Holdings. The rebalancing of the Hong Kong index, which is scheduled to take place this quarter, also contributed to the optimism, as it is expected to rebalance the index towards more attractive sectors and stocks.

US Indices Fall

In stark contrast to the Hong Kong market, US indices tumbled, as investors continue to wrestle with concerns over the economy and interest rates. The S&P 500 fell 1.5% to 4,144, while the Nasdaq Composite declined 1.7% to 13,133. The Dow Jones Industrial Average shed 0.8% to 33,419.

The main catalyst for the sell-off was the release of poor consumer confidence data, which sparked concerns over the strength of the US economy. The data showed a decline in consumer sentiment, driven in part by worries over inflation and interest rates. The news also fueled speculation that the Fed may need to tighten monetary policy more aggressively to keep inflation in check.

Commodities Lower

Commodity markets also felt the brunt of the selloff, as investors sold off risk assets across the board. Gold, which had been a safe-haven darling in recent days, fell 0.7% to $1,650 per ounce. Oil prices declined, with Brent Crude dropping 1.5% to $64.50 per barrel. Copper, which had been a beneficiary of China’s demand-driven growth story, gave up 2.3% to $3.40 per pound.

Bitcoin Falls

Bitcoin, the original cryptocurrency, continued its downward trend, falling to a 3-month low of $85,400. The decline, which has now reached 10% over the past week, has been attributed to a combination of factors, including regulatory concerns, volatility in traditional markets, and profit-taking by investors.

Geopolitics

Meanwhile, geopolitics continued to play a significant role in shaping market sentiment. In a surprise move, Trump announced plans to impose tariffs on copper imports, citing national security concerns. The decision has sparked concerns over a potential trade war, as copper is a critical component in a range of industries, including construction, transportation, and electronics.

In related news, Trump also hinted at lifting sanctions on Russia, in a move that has sent shockwaves through the international community. The announcement has raised concerns over the potential impact on global security and the economy, particularly in the context of ongoing tensions between the US and Russia over Ukraine.