HONG KONG: Hong Kong stocks jumped on Monday, led by tech and mainland shares listed in the city, as China is set to receive lower tariffs after the US Supreme Court ruling.
The benchmark Hang Seng Index advanced 2.5 percent at market close to 27,081.91, the strongest level since February 12.
The Hang Seng China Enterprises Index which tracks major mainland firms listed in the city, bounced 2.7 percent, its best single-day gain in a month.
Mainland markets will resume trading on Tuesday after the nine-day Lunar New Year holiday.
Sentiment was largely upbeat following the US Supreme Court’s decision on Friday to strike down Donald Trump’s sweeping tariffs, which China is making “full assessment” of.
China should see the largest tariff reduction as it faces the highest tariff rates at the outset, declining to 24 percent from 32 percent, according to analysts at Morgan Stanley.
Trump will travel to China from March 31 to April 2 for a highly anticipated meeting between the leaders of the world’s two biggest economies.
“The US tariff ruling and Trump’s finalized China visit schedule is lending a support to risk appetite,” Zhang Qiyao, chief strategy analyst at Industrial Securities, wrote in a note. “Although Trump may seek other tariff tools as substitutes which could still bring some uncertainty… the risk of sharp twists in US-China relations will be relatively controllable in near term ahead of his visit,” he added.
The Hang Seng Tech Index rallied as much as 4 percent to rebound from a seven-month low struck in the Friday trading session amid renewed optimism towards China’s AI developments.
Alibaba jumped 3.5 percent and Tencent rallied 3.1 percent. Chipmaker SMIC surged 5 percent, the best gain in nearly two months.
Investors are also digesting early data releases for the Chinese New Year holiday period, which delivered a “broadly firm” demand signal, with upbeat retail sales, resilient travel and improved home sales, according to Citi analysts.
“With the economy off to a steady start, market focus will shift to the NPC starting March 5,” they wrote in a note.
Around the region, MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.9 percent in light trade.
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