Hong Kong stocks gain on foreign inflows and stimulus hopes

[WORLD] Hong Kong stocks saw modest gains on Tuesday, buoyed by optimism surrounding foreign investments in local assets, which helped drive the city’s dollar to the upper end of its trading band.

The Hang Seng Index climbed 90 points, or approximately 0.4 percent, to reach 22,595 by 10 a.m. local time. Meanwhile, the Hang Seng Tech Index dipped by 0.5 percent. On the mainland, the CSI 300 Index advanced by 0.6 percent, and the Shanghai Composite Index rose about 0.5 percent.

AIA Group, the region's largest publicly listed life insurer, saw its stock rise by 2.4 percent, while Chow Tai Fook Jewellery Group gained 2.3 percent. JD.com, however, saw its shares fall nearly 2 percent.

The recent rally in the Hang Seng Index is part of a broader trend of resilience in Hong Kong’s equity markets. The benchmark index has surged more than 12 percent since the start of 2025, recovering from a sharp downturn in early April and reflecting a resurgence of investor confidence. Key sectors driving this growth include technology, healthcare, and consumer goods, with analysts highlighting the market's ability to bounce back from external disruptions, which has exceeded expectations thus far this year.

Capital inflows have placed additional pressure on the Hong Kong dollar, prompting the Hong Kong Monetary Authority (HKMA) to intervene in the currency market for the first time in over four years. On Saturday, the HKMA injected HK$46.54 billion (approximately US$6 billion) to maintain the local currency within its pegged range against the US dollar after the Hong Kong dollar reached the strong end of its trading band at 7.75 per US dollar. This move underscores Hong Kong’s appeal as a safe-haven investment destination amid global uncertainties, while also illustrating the delicate balancing act the HKMA must perform to ensure currency stability.

AIA Group’s stock performance follows the announcement of a 13 percent increase in the value of its new business for the first quarter of 2025, fueled by strong growth in its Premier Agency channel and a solid capital position. The insurer also reported a 7 percent rise in annualized new premiums, highlighting sustained demand for protection and savings products in the Asia-Pacific region.

Chow Tai Fook Jewellery Group’s gains come on the heels of its recent achievement of being ranked among the world’s top 100 retailers, reaching its highest-ever position in Deloitte’s 2025 Global Powers of Retailing report. The company is undergoing a brand transformation, unveiling new image stores and exclusive product collections as part of its preparations for its 100th anniversary in 2029. These efforts are aimed at strengthening customer engagement and positioning the company for sustained growth in an increasingly competitive retail environment.

JD.com’s drop follows a tough month in which its shares plummeted more than 20 percent, underperforming both the broader retail-wholesale sector and the S&P 500. Investors are now keenly awaiting the company’s upcoming earnings report, which is expected to show a year-on-year increase in both earnings per share and revenue. Despite the recent stock decline, analysts point out that JD.com is currently trading at a significant valuation discount relative to its industry peers, potentially offering upside if the company’s business trends improve as anticipated.

Looking forward, market participants are keeping a close eye on the interplay between US Federal Reserve policies, regional geopolitical developments, and capital flows into Hong Kong. With the HKMA's recent interventions and the strong year-to-date performance of the Hang Seng Index, the city’s financial markets remain a focal point for global investors, balancing opportunities with caution amid ongoing uncertainties.