Hong Kong stocks rise amid tariff war optimism

[WORLD] Hong Kong stocks advanced further on Wednesday, building on a two-month high, as investor sentiment was buoyed by hopes that China can weather the ongoing tariff conflict and maintain steady economic momentum.

The Hang Seng Index edged up 0.5 per cent to 23,807.13 at the midday break, putting it on track for its highest close since March 24. The Hang Seng Tech Index rose 0.4 per cent. On the mainland, the CSI 300 Index climbed 0.7 per cent while the Shanghai Composite added 0.4 per cent.

Analysts credit the continued upswing to growing confidence in China’s economic durability, bolstered by expectations of additional stimulus from policymakers aimed at mitigating external headwinds. Investor optimism has been further lifted by stronger-than-expected industrial output and retail sales data, reinforcing the outlook for a sustained recovery in the world’s second-largest economy.

Electric vehicle manufacturers led the charge, with Li Auto surging 3.4 per cent to HK$114.80 and BYD gaining 2.8 per cent to HK$457.20. Alibaba Group rose 0.6 per cent to HK$122.40, while Tencent Holdings also advanced 0.6 per cent to HK$520.

The rally in EV shares followed renewed policy backing from Beijing, including prolonged subsidies for new energy vehicles and increased investment in charging infrastructure. Analysts note that China’s green mobility agenda continues to attract investor interest, with domestic EV makers expanding their market presence both locally and internationally.

On the downside, Trip.com Group fell 1.2 per cent to HK$499.40 after Morningstar cautioned that declining hotel and ticket prices could dent revenue growth, despite the company reporting a 16 per cent year-on-year rise in quarterly revenue.

The mixed performance among tech stocks underscores lingering investor caution amid ongoing regulatory uncertainties. While industry giants like Alibaba and Tencent have regained some stability following extended periods of volatility, smaller tech firms remain susceptible to shifts in policy, particularly in areas such as data governance and antitrust regulation.

Globally, markets are watching closely as China crafts its response to intensifying trade tensions. Some economists anticipate targeted fiscal and monetary support aimed at shoring up export-heavy sectors. The People’s Bank of China has already adopted a more dovish stance, having lowered banks’ reserve requirement ratios last month to enhance liquidity.

Looking ahead, traders are expected to scrutinize upcoming corporate earnings and policy signals for insights into the market’s trajectory. With the U.S. Federal Reserve’s interest rate path contributing to broader market uncertainty, Hong Kong stocks may experience heightened volatility, potentially putting the current rally to the test.