US-China Trade Tensions Ease, Hang Seng Index Hits Highest Close Since February 2022

The Hang Seng Index in Hong Kong is expected to close at its highest level since February 2022, driven by a rebound in risk appetite and easing US-China trade tensions. Alibaba and Tencent were among the top performers, while Chinese equities gained momentum as the country's growth surpassed Beijing's target. Nvidia's plans to resume chip sales to China added to the optimism.

The Hang Seng Index (HSI) in Hong Kong is expected to close at its highest level since February 2022, reflecting a rebound in risk appetite and easing US-China trade tensions. On Wednesday, the HSI advanced as much as 1.1%, extending gains for a fifth consecutive day [1]. This upward trend was driven by several key factors, including improved investor sentiment and a boost in Chinese equities.

Alibaba Group Holding Ltd. and Tencent Holdings Ltd. were among the top performers on the Hang Seng Index, contributing significantly to the overall gains. The Hang Seng China Enterprises Index, another closely watched gauge, also jumped as much as 1.3%, further indicating the momentum in Chinese equities [2].

The rebound in Chinese equities can be attributed to several factors. First, the easing of geopolitical tensions between the United States and China has led to a reduction in risk aversion among investors. Second, China's economic growth has surpassed Beijing's target, providing a positive outlook for the country's financial markets. Lastly, Nvidia's plans to resume chip sales to China have added to the optimism, as the tech giant's products are crucial for various industries in China [2].

Investors are also optimistic about the future of the Hang Seng Index, with the current trend suggesting that the index is poised for further growth. The combination of improved economic indicators, reduced geopolitical risks, and positive corporate earnings reports is likely to continue driving the index higher.

In conclusion, the Hang Seng Index's expected high close is a testament to the improving risk appetite and the positive outlook on the Chinese economy. As geopolitical tensions ease and Chinese equities regain momentum, investors are likely to continue to benefit from the upward trend in the Hang Seng Index.

References:
[1] https://www.investing.com/indices/hang-sen-40
[2] https://www.bloomberg.com/news/articles/2025-07-16/hang-seng-index-heads-for-highest-close-since-feb-2022-md5bx8nt