The Hang Seng Index rose 141 points, or 0.6%, to close at 23,654 on Wednesday, notching its second consecutive day of gains as investor sentiment improved amid hopes for a thaw in U.S.-China trade relations.
Hang Seng finishes 0.6% higher
Optimism was fueled by reports of an upcoming phone call between U.S. President Donald Trump and Chinese President Xi Jinping, raising expectations that the two leaders could find common ground and ease mounting trade tensions. Adding to the backdrop was the approaching deadline for U.S. trading partners to submit proposals aimed at avoiding steep tariffs scheduled to take effect in just five weeks, keeping trade policy in sharp focus for global markets.
Sector-wise, Hong Kong’s healthcare stocks outperformed, with the healthcare index climbing around 3% as investors rotated into the sector on expectations of robust earnings growth from innovative drug manufacturers. Notably, Innovent Biologics led the rally with a sharp 13.8% gain, buoyed by strong clinical trial updates and positive analyst coverage. Other biotech and pharmaceutical names also saw solid gains, including CSPC Pharmaceutical (up 2.8%), Hansoh Pharmaceutical (2.6%), and Wuxi Biologics (1.6%), as confidence grew in the long-term potential of China’s biopharma sector.
Tech sentiment was also lifted, with Xiaomi edging higher after CEO Lei Jun stated that the company’s electric vehicle (EV) division could reach profitability in the second half of 2025—a milestone that, if achieved, would mark a significant turnaround for the tech giant’s ambitious automotive pivot. Meanwhile, consumer and industrial plays also posted notable gains: Smoore International surged 12.1% following strong earnings guidance, Pop Mart International rose 4.6% on upbeat consumer spending trends, and Meituan advanced 2.9% amid ongoing recovery in food delivery demand.
Market enthusiasm tempered by geopolitical concerns
The U.S. implemented a sharp 50% tariff on imported steel today, raising fears of retaliatory measures from affected nations, including China. Investors also remained cautious ahead of key macroeconomic data, particularly China’s services PMI for May, which could provide fresh insights into the health of the non-manufacturing sector. In April, services activity had grown at its slowest pace in seven months, underscoring the fragility of the post-pandemic recovery.
Despite lingering uncertainties, Wednesday’s gains reflected a cautiously optimistic tone as investors looked for clarity on trade, policy, and growth trajectories heading into the second half of the year.
