Hang Seng jumps by almost 2%, hits near four-year high

The Hang Seng Index surged 491 points, or 1.9%, to close at 25,830 on Monday, extending gains into a second straight session and marking its highest level since October 2021.

The advance was broad-based, driven by renewed optimism over potential U.S. interest rate cuts as softer labor market data in America raised expectations of easier Fed policy later this year.

In mainland China, equities also pushed higher, with benchmark indexes climbing nearly 10% month-to-date, reflecting a liquidity-fueled rally supported by strong domestic policy signals. On Monday, the People’s Bank of China (PBoC) injected a net CNY 465.7 billion into the financial system via open market operations—its largest single-day liquidity addition since late July—to ensure ample funding conditions and sustain investor confidence.

Tech shares led the gains in Hong Kong. The Hang Seng Tech Index jumped over 3%, lifted by anticipation ahead of Nvidia’s earnings and enthusiasm surrounding DeepSeek’s upgraded AI model, which is notable for being trained on Chinese-developed chips. This provided a psychological boost to the domestic tech sector amid ongoing U.S.–China semiconductor tensions.

Beyond tech, consumer, property, and financial stocks also rallied. Policy support for the property sector was in focus after Shanghai announced the scrapping of property taxes for eligible first-home buyers and further eased purchase restrictions in suburban districts—moves designed to stabilize housing demand and restore confidence in the market.

Still, some caution lingered as investors awaited the release of China’s January–July industrial profit data, which is expected to provide a clearer signal on the health of the manufacturing sector. Analysts warn that persistent pressure on corporate margins could temper the sustainability of the rally if earnings fail to catch up with valuations.

Among notable movers, KE Holdings jumped 5.6%, Galaxy Entertainment climbed 5.3%, while Lenovo added 3.9% on strong momentum in PC demand. Meituan and Tencent rose 3.0% and 2.4%, respectively, underpinning the broader advance across blue-chip counters.

Overall, sentiment in Hong Kong and mainland markets appears to be turning decisively more constructive, though the trajectory ahead will likely hinge on a delicate balance between policy support, earnings performance, and global macro signals.