Hong Kong Stocks Soar to Near Three-Week High

Hong Kong equities experienced a surge, reaching levels unseen in almost three weeks on Wednesday. This upward trend mirrors gains in global markets, fueled by growing optimism about a potential easing of trade tensions between China and the U.S. Furthermore, reassurance from U.S. President Donald Trump that the Federal Reserve Chairman’s position is secure has bolstered investor confidence.

Shares in mainland China also saw gains during the morning trading session.

By the midday recess, Hong Kong’s Hang Seng Index had risen by a substantial 2.41%, hitting 22,081.42 points, marking its highest level since April 3.

The Hang Seng China Enterprises Index also saw a significant increase of 2.15%, while the Hang Seng Tech Index experienced an even more impressive surge of 3.11%.

Market Sentiment Stabilizes

Market sentiment has found stability, encouraged by President Trump’s more diplomatic approach and increasing hopes for a de-escalation in trade tensions between the U.S. and China, according to analysts.

During a question and answer session with reporters on Tuesday, Trump voiced optimism that a trade agreement with China could lead to considerable tariff reductions.

U.S. Treasury Secretary Scott Bessent expressed his belief that a de-escalation in U.S.-China trade tensions is likely. However, he noted that negotiations with Beijing have not yet commenced and are expected to be a challenging process.

Trump has also softened his stance on potentially dismissing Fed Chair Jerome Powell, following several days of escalating criticism regarding the central bank chief’s reluctance to lower interest rates.

Conversely, in onshore markets, the increase in A shares was relatively subdued, reflecting investors’ continued apprehension about the rapidly changing tariff landscape and the considerable uncertainty surrounding the prospects of bilateral trade relations with the United States.

At the midday break, the Shanghai Composite Index showed a marginal increase of 0.04%, reaching 3,301.01 points, while the blue-chip CSI300 index was up by 0.22%.

While Chinese exports have remained resilient, economists at Commerzbank caution that this momentum may soon diminish.

Commerzbank economists suggest that a swift resolution leading to reduced tariffs between China and the U.S. appears improbable. They added that in the immediate future, U.S. companies may struggle to find alternatives to Chinese intermediate inputs. However, supply chains are likely to adapt over time to some degree.

Across the region, the MSCI’s Asia ex-Japan stock index increased by 1.87%, while Japan’s Nikkei index rose by 2.10%.