HONG KONG: China and Hong Kong stocks jumped on Wednesday as a US ceasefire deal with Iran lifted investors’ appetite for risk. China’s blue-chip CSI300 Index jumped 3.5 percent, its biggest daily gain since October 2024, and the Shanghai Composite Index rose 2.7 percent.
Hong Kong’s benchmark Hang Seng gained 3 percent. Hong Kong-listed tech giants surged 5.2 percent.
The two-week ceasefire agreement raised hopes of an easing in geopolitical tensions sparking a relief rally across major Asian stocks and currencies.
Cloud computing, semiconductors, the gold industry, as well as airline stocks led the rally. Energy stocks underperformed.
In Hong Kong, index heavyweights, miner CMOC and food delivery giant Meituan soared more than 10 percent each. Semiconductors and real estate companies also outperformed.
Today’s rally looks “broader than a pure geopolitical relief trade,” said Charu Chanana, chief investment strategist at Saxo, citing the jump in Hong Kong property stocks as a sign that investors are reacting to improving demand.
The rally can stretch further in the near term, she added, especially if lower oil prices, yuan strength and improving Hong Kong property sentiment keep reinforcing each other.
On the policy front, markets believe Chinese policymakers will maintain a wait-and-see approach unless external shocks to the economy increase significantly.
Some investors expect the rebound in China shares to be relatively mild, given they did not experience a meaningful selloff amid the Iran war. “As a result, the scope for a rebound, if and when geopolitical risks ease, appears more limited,” Yan Wang, chief emerging market and China strategist at Alpine Macro, said in a note.
The smaller Shenzhen index ended up 4.35 percent and the start-up board ChiNext Composite index jumped 5.91 percent.