China and Hong Kong Stocks Rise Amid Trade Optimism

Stocks in China and Hong Kong experienced gains on Friday, poised to conclude a second consecutive week positively. Market sentiment has found stability following the White House’s softened stance on China, despite the absence of significant advancements in trade negotiations.

Market Performance

At the close of the midday session, the Shanghai Composite index had increased by 0.2% to reach 3,302.19, while the CSI300 index, representing China’s blue-chip companies, saw a rise of 0.4%. Hong Kong’s Hang Seng Index surged by 1.4%, marking a 3.8% gain for the week, its strongest performance in almost two months.

All three indexes reached their highest levels since April 3, following President Trump’s announcement of “reciprocal tariffs” on US imports, which had previously triggered market instability. These benchmarks are also on track for a second consecutive week of gains.

Easing Tensions

Recent reports indicate that the White House is considering measures to de-escalate trade tensions with China. President Trump mentioned on Thursday that trade discussions between the two nations are currently in progress.

Earlier in the week, Treasury Secretary Scott Bessent highlighted the necessity of de-escalation for the world’s leading economies to restore balance in their trading relationship.

Expert Analysis

Eugene Hsiao, head of China equity strategy at Macquarie Capital in Hong Kong, commented that “Any progress towards a trade deal helps to settle markets concerns over the worst-case scenario of a full decoupling of the world’s two largest economies.” He also noted that markets are likely to remain in a “wait and see” mode due to recent market fluctuations.

Tech Sector Boost

Technology shares provided a boost to both domestic and international markets on Friday. The CSI Artificial Intelligence Index rose by 1.4%, while the chip sector sub-index recovered earlier losses to increase by 0.1%. Hong Kong’s Hang Seng Tech Index also saw a significant jump of 1.9%.

Eli Lee, chief investment strategist at Bank of Singapore, stated, “We are adopting a barbell approach favouring the technology and consumer staples, and we particularly favour companies with pricing power and business models that are relatively sheltered from tariff headwinds.”