Hong Kong Stocks Surge on Trade Tension Relief, EV Sales

Hong Kong stocks experienced a surge on Friday, reaching levels not seen in nearly a month. This increase was fueled by emerging indications of reduced trade tensions between China and the United States, which provided reassurance to investors. Simultaneously, electronic vehicle (EV) manufacturers saw their stocks rally due to robust sales figures.

The Hang Seng Index in Hong Kong demonstrated significant growth, increasing by 1.7% to reach 22,493.96 by the midday trading session. This represents the highest point for the index since April 3.

This upswing follows a downturn in April, during which the index fell by 4.3%. This decline marked the most substantial monthly drop since November 2024, triggered by US President Donald Trump’s imposition of what he termed a “reciprocal tariff,” leading to instability in global markets.

The Hang Seng China Enterprises Index also saw positive movement, rising by 1.8% to reach 8,224.45, similarly achieving a one-month peak.

Mainland markets are scheduled to remain closed until the following Tuesday in observance of the Golden Week holiday.

China’s Ministry of Commerce has stated that Beijing is currently “evaluating” a proposal from Washington to hold discussions regarding Trump’s tariffs. This move suggests a potential reduction in the trade conflict that has caused turbulence in global markets.

An analyst at Citi noted that investors are encouraged by signs suggesting a possible easing of tensions between the US and China, as well as the initiation of trade negotiations with Japan and other nations.

EV manufacturers are among the leading performers in Hong Kong, benefiting from strong delivery numbers reported for April.

Xpeng experienced a notable surge of 7.6%, reaching a one-week high after announcing a substantial 273% year-on-year increase in smart EV deliveries for the previous month. Likewise, Li Auto saw a rise of 4.4%, and BYD gained 2%, bolstered by increased sales.

Tech stocks also made gains, with the Hang Seng Tech Index increasing by 3.3%. Alibaba shares rose by over 4%, while Tencent shares increased by 2.4%. Both stocks were trading near their highest levels in the past month.

The Chinese yuan strengthened in offshore trading, reaching a high of 7.2524, marking its strongest level in a month.