Hong Kong stocks extend rally on China stimulus and trade hopes

[WORLD] Hong Kong stocks continued their upward momentum for the sixth consecutive day, buoyed by Beijing’s announcement of several new measures aimed at supporting the economy and stabilizing markets ahead of critical US-China tariff negotiations this weekend.

The market rally reflects growing optimism among investors as Chinese authorities adopt a more proactive stance on economic stimulus. Recently, policymakers have rolled out targeted fiscal policies, including tax incentives for small businesses and increased infrastructure spending, in an effort to counteract slowing growth. Analysts believe these actions are intended to bolster investor confidence ahead of the upcoming trade talks with the United States.

Meanwhile, the US Federal Reserve opted to maintain its interest rate, signaling it is in no rush to cut rates. Additionally, the Trump administration indicated its willingness to lift semiconductor export restrictions, which triggered a surge in Nvidia’s stock price.

The potential relaxation of semiconductor export controls could mark a significant shift in the fraught US-China tech relationship, which has been marred by trade restrictions for years. Nvidia, a key supplier of AI chips to Chinese companies, saw its shares jump more than 3% in after-hours trading. However, market analysts caution that any long-term resolution will hinge on the outcome of this weekend’s crucial discussions.

By 11am, the Hang Seng Index had risen almost 1%, reaching 22,924.95, while the Hang Seng Tech Index climbed 1.5%. On the mainland, the CSI 300 Index gained 0.7%, and the Shanghai Composite Index advanced 0.4%.

The tech sector’s strong performance underscores renewed investor interest in growth stocks, particularly as global markets recalibrate in the wake of easing geopolitical tensions. Companies like Tencent and Alibaba, which have faced regulatory hurdles in recent years, were among the biggest winners, fueled by expectations of a more stable regulatory environment moving forward.

In contrast to the rally in Hong Kong, other Asian markets showed mixed results. Japan’s Nikkei 225 edged down due to a stronger yen, while South Korea’s Kospi posted modest gains, with chip stocks following Nvidia’s lead. These regional disparities highlight the varied effects of US monetary policy and China’s economic stimulus efforts on global markets.