SHANGHAI: Hong Kong stocks rose the most in two months on Monday, while China shares rebounded following last week’s heavy selloff, as signs of easing trade tensions strengthened bets that US President Donald Trump will once again back down from his tariff threats.
Investors are also fixated on a Chinese Communist Party leadership meeting this week that will map China’s five-year vision, as authorities released third-quarter economic data on Monday that was in line with forecasts.
Hong Kong’s benchmark Hang Seng Index closed up 2.4 percent, the biggest percentage rise since mid-August. Tech shares led the gains.
China’s blue-chip CSI300 index and the Shanghai Composite Index both climbed roughly 0.6 percent.
US Treasury Secretary Scott Bessent said on Friday he expects to meet this week with Chinese Vice Premier He Lifeng to try to forestall an escalation of US tariffs on Chinese goods that Trump said was unsustainable.
Last week, China and Hong Kong stocks posted their biggest weekly drop since April as Trump threatened 100 percent tariffs on Chinese exports.
“Trump will definitely back down,” said Yuan Yuwei, hedge fund manager at Water Wisdom Asset Management.
“A hard decoupling will push up US inflation and inflict pain on ordinary Americans,” he said.
Official data published on Monday showed China’s economy grew 4.8 percent in the third quarter, as expected, marking the weakest pace in a year. All eyes are now on the so-called fourth plenum, a gathering of top CCP officials, from Monday to Thursday, which will review a proposed roadmap for China in 2026-2030.
The five-year plan is China’s strategy map that “tells you where the leaders are going to be directing capital, talent and subsidies,” said Megan Le, a London-based senior equity analyst at GIB Asset Management.
“If policymakers have the same messaging around innovation and self-sufficiency, commitment to capital markets and shareholder returns, it is quite a nice support for investors.”