Chinese stocks in Hong Kong rallied into bull market territory on Monday, buoyed by optimism over upcoming U.S.-China trade talks and growing enthusiasm around artificial intelligence breakthroughs.
The Hang Seng China Enterprises Index rose as much as 1.7% during the day, putting it on track for a gain of more than 20% from its April 7 low. Gains in tech and e-commerce stocks led the advance, with the index outperforming the MSCI Asia Pacific Index, which rose 0.9%.
Investor confidence was lifted by signs of easing trade tensions. In April, U.S. President Donald Trump imposed sweeping tariffs, prompting a sharp escalation in the U.S.-China trade dispute. However, the subsequent 90-day pause in most tariffs has helped calm markets, at least for now. Representatives from both countries are meeting in London today in a bid to reach a broader agreement.
“Markets are hopeful that today’s U.S.-China trade talks will yield positive results,” said Marvin Chen, a strategist at Bloomberg Intelligence. “While mainland A-shares have been relatively stable during the trade conflict, Hong Kong stocks more accurately reflect international investor sentiment toward China.”
Despite recent volatility, the Hang Seng China Enterprises Index remains one of the best-performing global equity benchmarks in 2025. Investors have been encouraged by expectations of further policy support and optimism driven by AI developments from companies like DeepSeek. Both the Hang Seng China Enterprises Index and the broader Hang Seng Index are up nearly 20% year-to-date.
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