The Hang Seng rallied 338 points or 1.6% to end at 21,395 on Thursday, rebounding from the previous session’s weakness. The recovery tracked a surge in US futures after President Trump cited “big progress” in negotiations aimed at helping Japan avoid higher tariffs, fueling hopes for easing global trade tensions.
Hang Seng soars 1.6% at finish
Investor sentiment was also boosted by Chinese President Xi Jinping’s call for greater regional unity and an “Asian family” during his Southeast Asia tour, which markets interpreted as a reassuring signal of China's commitment to regional stability and cooperation.
Gains were broad-based, with notable strength in the tech, property, and consumer sectors as investors rotated into growth-sensitive names. However, the upside momentum was somewhat capped after Fed Chair Powell warned that prolonged tariff disputes could slow global economic growth and exert upward pressure on consumer prices, sparking concerns about a potential stagflationary environment.
Adding to the cautious tone, Goldman Sachs released a report estimating that US investors might be forced to divest up to $800 billion of mainland Chinese equities in a worst-case scenario of full financial decoupling between the US and China. This underlined lingering geopolitical risks despite Thursday’s rally.
Richest companies lead the gains
Among individual stocks, the top three companies by market capitalization all closed higher: Tencent rose 2.0%, Xiaomi gained 1.2%, and Meituan added 0.8%. Standout performers in the broader market included Mixue Group, which soared 6.5% amid strong earnings expectations, KE Holdings, up 5.0% on upbeat sales forecasts, and Longfor Group, which climbed 4.7% as easing credit conditions for developers spurred optimism in the property sector.
Trading volumes were moderately higher than the previous day, suggesting cautious but growing investor participation as markets await further clarity on both trade talks and US monetary policy direction.
