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Cao Li

Hong Kong stocks rose for a fifth straight trading day on anticipation of US-China trade talks later this week, coupled with a policy package from Beijing aimed at protecting the economy against tariffs.
The Hang Seng Index rose 0.1 per cent to 22,691.88 at the close on Wednesday, while the Hang Seng Tech Index was down 0.8 per cent. Both indices were higher earlier in the day. On the mainland, the CSI 300 Index closed 0.6 per cent higher and the Shanghai Composite Index rose 0.8 per cent.
Insurer AIA Group increased 2.9 per cent to HK$61.75, Macau casino operator Sands China rose 2.7 per cent to HK$15.36 and travel platform Trip.com was 2.3 per cent higher at HK$482.40. Bottled water company Nongfu Spring, a major gainer on Tuesday, lost 2.2 per cent to HK$37.75, while Mengniu Dairy closed 3.6 per cent lower at HK$19.26.
Hong Kong stocks have recovered somewhat since April 2 when US President Donald Trump applied tariffs on Washington’s trading partners, with China bearing the brunt of the onslaught. As of Tuesday, the Hang Seng Index was down by around 2 per cent from April 2.
Early on Wednesday, the US and China said tariff-focused trade talks would begin later this week in Switzerland. Chinese Vice-Premier He Lifeng was expected to meet with US Treasury Secretary Scott Bessent from May 9 to 12. The Geneva meeting would be the first confirmed talks between the two countries since the tariffs were rolled out more than a month ago.
In an interview with Fox News, Bessent said the talks would focus on de-escalation rather than a big trade deal.
“We’ve got to de-escalate before we move forward,” he said.
Also Wednesday, regulators from the People’s Bank of China (PBOC) and the China Securities Regulatory Commission unveiled measures to support the economy and stabilise markets. PBOC governor Pan Gongsheng said the central bank cut a key policy rate by 10 basis point to 1.4 per cent from 1.5 per cent. The central bank also lowered the reserve requirement ratio for banks by half a percentage point, which will free up around 1 trillion yuan (US$138.6 billion) in liquidity.
China is also coming up with measures to support exporters and boost confidence among foreign investors. But analysts said the measures may not be sufficiently soothing.
The policies “can only partially offset tariff shocks”, according to a report from Morgan Stanley, which added that “the overall policy stance remains reactive and supply-centric”.
“While a more relaxed monetary policy is welcome by the market, what investors look for is really a bigger fiscal stimulus in China,” said Wang Qi, the chief investment officer of UOB Kay Hian’s wealth management division in Hong Kong. “Monetary policy has been less effective than fiscal policy, due to low confidence in the economy, leading to anaemic loan growth.”
Speaking of tariff talks, Wang said: “Any talk is positive news relative to the radio silence between the US and China now. But trade negotiations are never easy, even between the US and Japan, which has less conflict than US-China. We expect a difficult process and a volatile market ahead. This is the beginning, not the end, in other words.”
Morgan Stanley said if tariffs on China were lowered, they would decline to elevated levels from prohibitive levels. The bank expects that tariffs will decline to 45 per cent by the end of the year, compared with 11 per cent before the beginning of 2025, including reciprocal levies with exemptions.
Lorraine Tan, director of equity research for Asia at investment researcher Morningstar, said the positive market reaction on Wednesday reflected an increase in risk appetite.
“I think this helps China equities possibly more because they are already trading on attractive valuations and any supportive domestic policies reduce risks of earnings downgrades,” she said.
On Tuesday, the Hong Kong Monetary Authority intervened for the fourth time since Friday to defend the city’s currency peg amid capital inflows, as investors bought the local dollar ahead of some major share listings, including Contemporary Amperex Technology (CATL), the world’s largest maker of electric vehicle batteries. CATL passed its listing hearing with Hong Kong’s stock exchange on Tuesday.
On Tuesday, mainland Chinese investors ploughed HK$13.48 billion (US$1.74 billion) into stocks and exchange-trade funds listed in Hong Kong through the Stock Connect programme’s southbound channel.
Elsewhere, Asia-Pacific markets were mixed: Japan’s Nikkei 225 was down about 0.1 per cent, South Korea’s Kospi Index added 0.6 per cent and Australia’s S&P/ASX rose 0.3 per cent.


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Hong Kong stocks rise as US-China trade talks seek de-escalation, boosting Hang Seng Index


Hong Kong stocks rise as US-China trade talks seek de-escalation, boosting Hang Seng Index.


Hong Kong stocks rise ahead of US-China trade talks focused on de-escalation

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Hong Kong stocks rise as US-China trade talks seek de-escalation, boosting Hang Seng Index

Hong Kong stocks rise as US-China trade talks seek de-escalation, boosting Hang Seng Index