The Hang Seng closed nearly unchanged at 23,782 on Tuesday, rebounding from early losses as most sectors advanced. Sentiment improved after Citigroup Inc. upgraded its outlook on Chinese stock markets to overweight, citing an AI breakthrough that could drive long-term growth in the sector.
Hang Seng ends flat after early declines
The tech index climbed over 1%, with major gains from Kuaishou Tech (+5.2%) and Semiconductor Manufacturing (+3.1%), as investors bet on increased investment in high-tech industries amid Beijing’s push for technological self-sufficiency.
Property and financial stocks also gained ground on optimism that China’s annual parliamentary meeting, which concludes today, would introduce measures to bolster market confidence. While the government reiterated its commitment to economic stability, lingering concerns over deflationary pressures, ongoing trade tensions with the US, and uncertainty in the property market continued to weigh on sentiment. Investors remain watchful for any policy shifts that could address the struggling real estate sector, particularly regarding liquidity support for developers and homebuyer incentives.
Concerns over trade war persist
Meanwhile, US futures inched higher following Monday’s sharp declines on Wall Street, as traders assessed the impact of economic policy shifts and fiscal tightening on recession risks. The recovery in risk appetite extended to select Chinese electric vehicle and automation stocks, with Xpeng surging 9.8% after announcing plans to begin mass production of flying cars and industrial robots by 2026. Zhejiang Leapmotor jumped 13.3% on news of a major partnership aimed at expanding its overseas presence.
Worst performers on Tuesday
On the downside, UBTech Robotics fell 6.0% amid profit-taking after recent strong gains, while KE Holdings dropped 3.5% on concerns over weaker-than-expected home sales data. Meituan also declined 1.5%, extending recent losses amid fears of increased regulatory scrutiny on China’s food delivery and e-commerce sectors. Looking ahead, investors will closely monitor upcoming economic data releases and further policy announcements from Beijing to gauge the near-term outlook for Chinese equities.
