Hong Kong stocks extend rally on trade talk hopes and tech rebound

[WORLD] Hong Kong's stock market extended its gains for a fifth consecutive day, driven by expectations of US-China trade talks later this week and continued capital inflows into the city, which have pushed the Hong Kong dollar to the strong end of its trading band.

The optimism in Hong Kong's markets mirrors broader regional trends, with investors across Asia responding to easing global recession concerns and softer-than-expected US inflation data. These factors have sparked hopes that the Federal Reserve may slow its interest rate hikes, easing pressure on emerging markets like Hong Kong. Analysts point out that the Hang Seng Index’s ongoing rally marks its longest winning streak since June, reflecting a renewed sense of confidence among institutional investors.

By 10am on Wednesday, the Hang Seng Index had gained 1.8 percent, reaching 23,075.77. The Hang Seng Tech Index saw a rise of 2.3 percent, while on the mainland, the CSI 300 Index advanced 0.6 percent, and the Shanghai Composite Index also climbed 0.6 percent.

Technology stocks have particularly benefited from recent policy support from Beijing, which has included new approvals for video game licenses and signals of a more lenient regulatory approach toward the sector. This has helped reverse some of the heavy losses suffered by Chinese tech giants in the past year. Market participants are now eagerly awaiting further developments from the upcoming US-China trade discussions, which are expected to address ongoing issues related to technology transfers and semiconductor exports.

AIA Group, a major insurer, surged 8 percent, short-video platform Kuaishou Technology rose over 3 percent, and Tencent Holdings gained 2.7 percent. In contrast, Macau casino operator Sands China dropped 1 percent, and sportswear maker Anta Sports declined by 0.5 percent.

AIA’s strong performance comes amid reports of better-than-expected demand for insurance products in Hong Kong and mainland China, as consumers increasingly prioritize health and retirement coverage in the wake of the pandemic. Kuaishou’s rally aligns with its recent earnings beat, showcasing impressive user growth and advertising revenue. Tencent’s rise follows its announcement of a new share buyback program, signaling management's confidence in the company’s long-term prospects.

On the flip side, Sands China’s decline reflects ongoing concerns over Macau’s gaming revenue, which remains below pre-pandemic levels due to reduced tourist arrivals and strict COVID-19 restrictions in mainland China. Anta Sports’ modest drop may be attributed to profit-taking after a strong performance earlier this month, as well as increased competition in the domestic sportswear market.