Hang Seng raised 2.3%
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This week, the Hong Kong stock market experienced a choppy performance due to a mix of factors, with trading closed on Friday for Good Friday. Over the remaining four trading days, the Hang Seng Index rose 2.3% cumulatively, while the Hang Seng Tech Index edged down 0.3%. On the news front, the U.S. Customs and Border Protection announced exemptions for certain reciprocal tariffs, covering electronic products such as smartphones, computers, and chips, which temporarily boosted market sentiment. China’s total value of goods imports and exports grew by 1.3% y/y in Q1 2025, with exports up 6.9%, reinforcing confidence in the resilience of the Chinese economy. On the policy front, multiple Chinese government departments jointly issued a notice to launch the “Buy in China” campaign, and Hainan Province released a consumption-boosting plan. Domestic demand-related stocks—such as retail and leisure goods—showed collective strength. However, negative factors cannot be overlooked: former U.S. President Donald Trump hinted at the possibility of imposing new tariffs on industries including semiconductors, leading to volatile moves in related sectors. Tech stocks were mixed, with some names falling amid market sentiment swings. Geopolitical tensions also added to market uncertainty.
In the U.S. stock market, trading was closed on Friday for Good Friday. As of Thursday, the S&P 500 had declined 1.5%, the Nasdaq dropped 2.6%, and the Dow Jones fell 2.7%. On the macro front, data from the U.S. Department of Commerce showed that retail sales in March surged 1.4% m/m, marking the largest monthly increase in over two years. Sales rose 4.6% y/y, the highest level since December 2023. The data suggest that consumers are accelerating their spending in anticipation of potential tariff adjustments. Of the 13 categories tracked in the report, 11 posted growth. Notably, auto sales recorded the biggest increase in two years. Excluding autos, retail sales were up 0.5% m/m, above the expected 0.4%. On the tariff front, the White House announced an increase in the total tariff rate on Chinese goods to 145%, while temporarily exempting certain electronic products. After China retaliated, the White House responded with a further 245% tariff hike on medical supplies and a dynamic adjustment of the tariff exemption list. Federal Reserve Chair Jerome Powell recently stated that the inflationary impact of tariffs could be more persistent, noting that tariff levels have even exceeded the upper bound of the Fed’s expectations. He also emphasized that the Fed will not cut rates or step in to support markets in response to volatility. According to the CME FedWatch Tool, as of April 18, the probability of the Fed holding rates steady in May rose to 90.9%. On the employment front, data from the U.S. Department of Labor showed that initial jobless claims for the week ending April 12 fell to 215,000, the lowest since the week of February 8, 2025, and below both the previous reading and expectations. The prior figure was revised up from 223,000 to 225,000. Continuing claims for the week ending April 5 rose to 1.885 million, higher than both the prior reading and expectations. The previous figure was revised down from 1.85 million to 1.844 million.
In the A-share market, the CSI 300 Index rose 0.6% this week, showing a narrow-range consolidation pattern. In terms of trading volume, all five trading days saw a continued decline, with daily turnover remaining below the 50-day average. The market is currently in a rally attempt phase, with the 200-DMA serving as key technical support. The gap between 3,843.4 and 3,782.0 points has become an overhead resistance level. On the macroeconomic front, data from the National Bureau of Statistics showed that China’s GDP reached RMB 31.8758 trillion in Q1, up 5.4% year-over-year at constant prices, and 1.2 percentage points higher than the growth rate in Q4 2024. The value-added industrial output of enterprises above designated size rose 6.5% y/y, accelerating from the January–February period and 0.7 percentage points higher than the full-year 2024 pace. The value-added of the services sector grew 5.3% y/y, 0.3 percentage points faster than in 2024. In terms of financial data, according to the People’s Bank of China, aggregate social financing in Q1 2025 increased by RMB 15.18 trillion, RMB 2.37 trillion more than the same period last year. As of the end of March, broad money supply (M2) stood at RMB 326.06 trillion, up 7% y/y; narrow money supply (M1) reached RMB 113.49 trillion, up 1.6%; and currency in circulation (M0) was RMB 13.07 trillion, up 11.5% y/y. The M2-M1 spread narrowed to 5.4 percentage points in March, down 1.5 percentage points from February. In Q1, RMB-denominated loans increased by RMB 9.78 trillion, while RMB deposits rose by RMB 12.99 trillion. On the trade front, data from the General Administration of Customs showed that China’s exports in March (in USD terms) grew 12.4% y/y, while imports declined 4.3%. In Q1, total goods trade reached RMB 10.3 trillion, up 1.3% y/y. Exports rose 6.13 trillion yuan, up 6.9%, while imports totaled 4.17 trillion yuan, down 6%. As for consumption, data from the National Bureau of Statistics showed that total retail sales of consumer goods reached RMB 4.094 trillion in March, up 5.9% y/y—an acceleration of 1.9 percentage points compared to the January–February period. On a month-over-month basis, retail sales rose 0.58%.
Leading stocks raised this week. The average stock in the MarketSmith Hong Kong 33 rose by 2.3% for this week. Our Hong Kong Model Portfolio rose by 0.8% for this week (see details in the Model Portfolio section). Since June 20, 2013, the Hong Kong 33 is up 703.5% vs. a 6.6% up for the Hang Seng.
The best performer in our Hong Kong 33 was BESTSTUDY EDU(03978), it’s a leading educational service institution in China. The stock gained 18.2% this week. EPS rating stands at 84, RS rating of 92, and A/D rating of A+.
Our Hong Kong Market Status are in a Rally Attempt.
From a technical perspective, the Hang Seng Index extended its rebound this week and successfully reclaimed the 100-DMA, a key medium-term indicator. However, trading volume continued to shrink, with daily turnover consistently below the 50-day average. The market remains in a rally attempt phase, with the 100-DMA offering near-term support, while the gap between 22,638.2 and 21,603.5 points has become an overhead resistance zone. In terms of Southbound inflows via the HK-China Stock Connect, the market saw a net inflow of HKD 23.185 billion this week, maintaining a net inflow trend, though the scale declined notably compared to previous weeks. Overall, the Hong Kong market may continue to trade sideways in the short term. Investors should closely monitor developments in U.S. tariff policy, key Chinese economic data, and geopolitical risks. At this stage, it is advisable for investors to remain calm and rational, avoid chasing short-term gains, and focus on fundamentally strong stocks with solid technical setups. A prudent and flexible strategy is recommended to navigate ongoing market volatility.
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published on April 17, 2025