China and Hong Kong stocks climb on robust economic data
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China and Hong Kong stocks ended the week higher, supported by stronger-than-expected economic performance in China and positive market sentiment. Better-than-anticipated data across key economic indicators reinforced optimism about the region’s recovery.
Weekly gains for key indices
China’s blue-chip CSI300 Index rose 0.3% on Friday, closing the week with a 2.1% gain. The Shanghai Composite Index edged up 0.2%, while Hong Kong’s Hang Seng Index added 0.3%, culminating in a weekly rise of 2.7% for the benchmark.
Economic growth beats expectations
China’s economy expanded by 5.4% in the fourth quarter of 2024 compared to the previous year, exceeding analysts' forecasts. This marks the fastest growth rate since Q2 2023, bolstered by a series of government stimulus measures. Industrial output also surged, growing 6.2% year-on-year in December, its quickest pace since April.
Technology and semiconductor stocks lead gains
Technology and semiconductor shares outperformed in both China and Hong Kong. Investors focused on themes of independent innovation amid escalating trade tensions with the United States.
China’s tech and semiconductor indexes climbed 1.4% and 2.4%, respectively. In Hong Kong, Semiconductor Manufacturing International Corp (SMIC) soared nearly 10%, approaching its highest level since July 2020.
Real estate sector mixed
The real estate market showed signs of stabilization, with official data indicating that China’s new home prices stopped declining month-on-month in December for the first time in 18 months. Despite this, real estate stocks remained flat overall. Notably, China Vanke faced volatility, dropping as much as 9% on Friday after reports of its CEO’s detention, though the stock recovered some losses later in the session.
Market outlook
The combination of robust economic growth and sector-specific gains has provided a positive backdrop for China and Hong Kong equities. With technology and industrial sectors driving momentum, investors remain cautiously optimistic as they navigate potential headwinds, including geopolitical uncertainties and trade challenges.
Weekly gains for key indices
China’s blue-chip CSI300 Index rose 0.3% on Friday, closing the week with a 2.1% gain. The Shanghai Composite Index edged up 0.2%, while Hong Kong’s Hang Seng Index added 0.3%, culminating in a weekly rise of 2.7% for the benchmark.
Economic growth beats expectations
China’s economy expanded by 5.4% in the fourth quarter of 2024 compared to the previous year, exceeding analysts' forecasts. This marks the fastest growth rate since Q2 2023, bolstered by a series of government stimulus measures. Industrial output also surged, growing 6.2% year-on-year in December, its quickest pace since April.
Technology and semiconductor stocks lead gains
Technology and semiconductor shares outperformed in both China and Hong Kong. Investors focused on themes of independent innovation amid escalating trade tensions with the United States.
China’s tech and semiconductor indexes climbed 1.4% and 2.4%, respectively. In Hong Kong, Semiconductor Manufacturing International Corp (SMIC) soared nearly 10%, approaching its highest level since July 2020.
Real estate sector mixed
The real estate market showed signs of stabilization, with official data indicating that China’s new home prices stopped declining month-on-month in December for the first time in 18 months. Despite this, real estate stocks remained flat overall. Notably, China Vanke faced volatility, dropping as much as 9% on Friday after reports of its CEO’s detention, though the stock recovered some losses later in the session.
Market outlook
The combination of robust economic growth and sector-specific gains has provided a positive backdrop for China and Hong Kong equities. With technology and industrial sectors driving momentum, investors remain cautiously optimistic as they navigate potential headwinds, including geopolitical uncertainties and trade challenges.