Hong Kong stocks extend from 3-year high on China growth optimism

Faster-than-expected China growth and Goldilocks scenario in US spark risk-on mood among investors

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Pedestrians walk in front of an electronic sign showing the Hang Seng Index in Hong Kong on July 11, 2025. Photo: AFP

Published: 10:21am, 21 Jul 2025Updated: 4:39pm, 21 Jul 2025

Hong Kong stocks kicked off the week’s trading on a strong note on Monday, with the benchmark extending the gain from a three-year high as optimism about the resilience of China’s growth and the risk-on mood in global equities buoyed sentiment.

The Hang Seng Index rose 0.7 per cent to 24,994.14 at the close, a level not seen since November 19, 2021. The Hang Seng Tech Index gained 0.8 per cent. The city’s financial markets opened for trading despite the aftermath of Typhoon Wipha on Sunday, which triggered the highest warning signal, injured dozens of people and halted flights.

On the mainland, the CSI 300 Index and the Shanghai Composite Index both climbed 0.7 per cent.

Xinyi Solar Holdings and Meituan rallied on expectations that a coming Politburo meeting would yield more measures to weed out overcapacity in the e-commerce and photovoltaic industries. Bottled water maker Nongfu Spring surged on expectations that family inheritance turmoil at Hangzhou Wahaha Group would be damaging to the brand image of the company’s major rival. Technology stocks advanced after Nvidia resumed exports of a key artificial intelligence chip to China.

Investors took on greater risk after China last week reported faster-than-expected economic growth of 5.3 per cent in the second quarter, surpassing its full-year growth target of around 5 per cent. In a sign of cooling geopolitical tensions, official Chinese data showed that exports to the US of rare earth materials, which are important for hi-tech products, surged almost eightfold last month.

Meanwhile, US stocks closed at record highs last week, with a Goldilocks scenario of low inflation and strong growth taking hold after official data showed robust retail sales and cooling consumer prices.

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