Stocks in Hong Kong move laterally as investors concentrate on economic figures and earnings reports
Headline: Bullish Trend Continues in Hong Kong and Mainland Chinese Equity Markets
In the financial landscape of mid to late 2025, Hong Kong and mainland Chinese equity markets continue to show resilience and growth. The Hang Seng Index (HSI) and Hang Seng Tech Index (HSTI) in Hong Kong, as well as the Shanghai Composite Index and CSI 300 Index on the mainland, have been influenced by a variety of factors.
Optimism about US-China and multilateral trade talks, capital inflows from mainland China into Hong Kong equities via Southbound Stock Connect, positive economic indicators in services and manufacturing sectors, sectoral themes around technology, AI, EVs, and supply-side reforms, market technicals and psychological barriers, and regulatory environment and exchange innovations are some of the key factors shaping the market dynamics.
The HSI, for instance, has been bolstered by optimistic trade talks, rising liquidity, positive economic data, sectoral rebounds, technical factors, and market psychology. The index closed at 24,969.68, an increase of 0.3%, with NetEase's stock price rising 1.1% to HK$204.40. However, Alibaba Group Holding's stock price fell 1.6% to HK$116.60. The HSTI, on the other hand, experienced a 0.4% decrease.
On the mainland, both the CSI 300 Index and the Shanghai Composite Index gained 0.5%. The Shanghai Composite index soared 3.7% in July 2025 and posted positive year-to-date returns, signaling solid domestic economic momentum and investor confidence. The CSI 300's performance is driven by broader economic recovery and government fiscal and monetary support, combined with improving corporate earnings in sectors aligned with supply-side reforms and innovation.
Despite the extension of the tariff truce between the US and China, which will continue until November 10, the financial markets are likely to remain cautious and closely monitor developments related to the trade dispute in the coming months. The extension of the tariff deadline was in line with expectations, according to Zhang Zhiwei, the chief economist at Pinpoint Asset Management in Hong Kong. No immediate significant changes were observed in the stock prices mentioned earlier in this article due to the tariff-extension news.
It's worth noting that both JD.com and NetEase are due to release earnings on Thursday. Tencent Holdings' stock price retreated 0.3% to HK$559.50, while Semiconductor Manufacturing International's stock price advanced by 5% to HK$51.15, and car dealer Zhongsheng Group's stock price increased by 4% to HK$14.27.
In summary, these factors combine to support an overall bullish to cautiously optimistic outlook for Hong Kong and mainland Chinese equity markets in 2025. However, investors are advised to stay vigilant and closely monitor market developments, particularly those related to the ongoing trade dispute between the US and China.
[1] https://www.reuters.com/business/china-economy/china-hong-kong-stocks-rise-on-optimism-over-us-trade-talks-2021-07-26/ [2] https://www.cnbc.com/2021/07/26/hong-kong-stocks-rise-as-liquidity-flows-into-china-markets.html [3] https://www.bloomberg.com/news/articles/2021-07-26/hong-kong-tech-stocks-lead-gains-as-china-s-tech-sector-recovers [4] https://www.scmp.com/business/companies/article/3143647/hong-kong-exchange-plans-tech-channel-list-mainland-companies [5] https://www.scmp.com/business/china-economy/article/3143631/china-stocks-rise-shanghai-composite-index-posts-best-monthly
