Hang Seng raised 0.6%
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The Hong Kong market was closed on Thursday and Friday due to the Labor Day holiday. During the remaining three trading days, the Hang Seng Index(HSI) rose 0.6%, while the Hang Seng Tech Index(HSTECH) gained 2.1%.
Overall, the market remained relatively subdued this week, showing little reaction to expectations of RRR and interest rate cuts or to signs of easing in U.S. tariff policy. This was mainly due to two factors: first, the upcoming holiday prompted investors to reduce risk exposure, leading to lower trading activity; second, investor sentiment remained cautious in light of ongoing policy developments and geopolitical uncertainty, further dampening market participation.
In the U.S. equity market, as of Tuesday this week, the S & P 500 Index(0S&P5) rose 0.6%, the Nasdaq Composite(0NDQC) gained 0.5%, and the Dow Jones Indus Actual(0DJIA) climbed 1.0%, extending the recent rebound trend.
On the tariff front, former President Trump signed an executive order delaying the planned 25% tariffs on imported automobiles and auto parts, which were originally set to take effect on May 3. The move is aimed at avoiding the compounding effect of concurrent auto and metal import duties. Under the new policy, automakers will be granted a 15% tariff exemption quota in the first year, which will be reduced to 10% in the second year, in a bid to encourage domestic production expansion. Additionally, the White House released compensation measures to provide phased tariff rebates for manufacturers that use imported auto parts but complete vehicle assembly in the U.S.
In terms of trade data, the U.S. Department of Commerce reported that the goods trade deficit widened 9.6% m/m in March to $162 billion. Imports rose 5% m/m to $342.7 billion—marking a record high for the fourth consecutive month—driven by a 15.2% surge in consumer goods imports, as businesses front-loaded purchases to hedge against potential tariff escalations. Imports of non-monetary gold also saw a significant increase, further boosting total import value. On the export side, shipments grew 1.2% m/m to $180.8 billion, but the pace of growth lagged far behind imports, exacerbating the trade imbalance.
On the employment front, the latest data from the U.S. Bureau of Labor Statistics showed that the number of job openings in March (JOLTS) fell to 7.192 million, below the expected 7.5 million. February’s figure was also revised downward from 7.568 million to 7.48 million. The March reading marked the lowest level since September of last year, reflecting a weakening in labor demand amid growing economic uncertainty.
Notably, several key economic indicators are set for release in the latter half of this week, including the March Core PCE Price Index, the initial estimate of Q1 real GDP, April’s ISM Manufacturing PMI, the ADP employment report, and the closely watched nonfarm payrolls report (including the unemployment rate). These data releases could inject heightened volatility into the markets.
In the A-share market, trading was closed on Thursday and Friday this week due to the Labor Day holiday. As of Wednesday, the CSI 300(000300) declined 0.4%, continuing the previous pattern of narrow-range sideways consolidation. Trading volume remained subdued, with daily turnover consistently below the 50-day average level. The market is currently in a rally attempt phase, technically supported by the 200-DMA. A gap in the 3,843.42–3,807.95 range has formed an overhead resistance level.
On the policy front, the recently held Politburo meeting of the CPC Central Committee delivered key policy signals, explicitly stating the intention to “implement RRR and interest rate cuts at an appropriate time” (with market expectations for a 50bps RRR cut and a 30bps rate cut, potentially injecting over RMB 1 trillion in liquidity). The meeting also announced the rollout of new structural monetary policy tools, with a focus on supporting technological innovation, consumer services, and stabilizing foreign trade. On the fiscal side, the government pledged to expand the issuance of ultra-long-term special treasury bonds, optimize the policy framework for the purchase of existing housing stock, and, for the first time, emphasized a policy direction to “sustainably stabilize and invigorate the capital market.”
Meanwhile, the National Development and Reform Commission, together with the Ministry of Finance, allocated the second batch of RMB 81 billion in ultra-long-term special bonds for 2024 to local governments, further supporting the nationwide campaign to upgrade consumer goods by replacing old products with new ones.
Reforms in the capital market are accelerating noticeably. New China Life Insurance and China Life Insurance each announced a RMB 10 billion capital contribution to jointly establish a private equity fund dedicated to investing in constituents of the CSI A500 Index.
On the economic data front, the National Bureau of Statistics reported that total profits of industrial enterprises above designated size reached RMB 1.50936 trillion in the January–March period, up 0.8% y/y. Out of 41 major industrial sectors, 24 recorded profit growth, accounting for nearly 60% of the total. Among these, 24 sectors showed either faster growth or narrower declines compared to the January–February period, representing 58.5% of the total.
By category, the manufacturing sector showed notable improvement, with first-quarter profits up 7.6% y/y, a 2.8 percentage point increase from the previous period. However, the Manufacturing Purchasing Managers’ Index (PMI) for April fell to 49.0%, down 1.5 percentage points m/m, indicating a moderation in manufacturing activity. The Non-Manufacturing Business Activity Index came in at 50.4%, down 0.4 percentage points m/m, but still remained in expansionary territory.
In the external trade sector, the State Council approved the establishment of 15 new cross-border e-commerce pilot zones, including the entire Hainan Island, and lowered the minimum threshold for departure tax refunds to RMB 200. However, attention should be paid to the potential risks stemming from an escalation of U.S. tariff actions against China.
Leading stocks raised this week. The average stock in the MarketSmith Hong Kong 33 rose by 0.8% for this week. Our Hong Kong Model Portfolio rose by 0.7% for this week (see details in the Model Portfolio section). Since June 20, 2013, the Hong Kong 33 is up 735.2% vs. a 10.2% up for the Hang Seng.
The best performer in our Hong Kong 33 was CENTRAL NEW EGY(01735), it’s a leading integrated new energy enterprise in China. The stock gained 14.2% this week. EPS rating stands at 91, RS rating of 85, and A/D rating of B-.
Our Hong Kong Market Status are in a Rally Attempt.
From a technical perspective, the Hang Seng Index continued last week’s sideways consolidation pattern, with trading volume shrinking further. Daily turnover remained below the 50-day average and even fell short of the lowest single-day volume recorded last week, indicating persistently weak investor participation. In the near term, the 21-DMA continues to serve as support, while resistance is seen at the upper gap range between 22,267.96 and 22,638.21 points. As for the Southbound inflow via the HK-China Stock Connect, a net inflow of 1.242 billion HKD was recorded this week. While this marked an improvement from last week, overall flows remained subdued.
Overall, the Hong Kong stock market is likely to remain range-bound in the short term, with investor attention shifting to post-holiday policy developments and external market movements. At this stage, investors are advised to remain calm and rational, avoid chasing gains blindly, and focus on stocks with stronger-than-expected earnings and sound technical patterns, adopting a prudent and flexible approach to manage market volatility. In addition, the Hong Kong market will be closed next Monday for the Labor Day and Buddha’s Birthday holidays. In the latter half of the week, China’s April CPI, PPI, and trade-related data will be released, which could have some impact on the market.
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published on April 30, 2025