Hong Kong Hang Seng Index closes up 1.3% at 24,825.66

Hong Kong Hang Seng Index closes up 1.3% at 24,825.66

The Hong Kong Hang Seng Index (HSI) closed up 1.3% at 24,825.66 on July 2, 2025, marking the fifth consecutive day of gains. This rally was driven by several key factors, including easing US-China trade tensions and optimism surrounding artificial intelligence (AI) advancements.

The index's recent performance has been bolstered by positive developments in the tech sector, with tech stocks leading the way. The Hang Seng Tech Index, which tracks the 30 largest tech companies listed in Hong Kong, rose by as much as 1.8% on Wednesday. This index has been at the forefront of the HSI's rally, driven by optimism over Chinese startup DeepSeek's breakthrough in AI and government support for AI development [4].

The latest gains in the HSI can also be attributed to the resumption of sales of certain AI chips to China by Nvidia. The chipmaker announced that it would sell its H20 chip, a less powerful, China-compliant alternative to its gold-standard acceleration chip, after receiving an assurance from the US government that export licenses would be granted [2].

Additionally, the HSI's performance has been supported by geopolitical developments, such as the meeting between US Secretary of State Marco Rubio and his Chinese counterpart at a summit in Malaysia. This meeting signaled diplomatic progress and further eased tensions between the two economies [4].

The Hang Seng Index's strong performance has also been reflected in other Asian markets. The Shanghai Composite Index and the CSI 300 Index, which track the performance of the largest companies listed in China, were up by 0.1% on Wednesday [2].

While the HSI's rally has been impressive, it is essential to note that profit-taking and volatility in the tech sector have capped gains. However, the overall sentiment remains bullish, with investors focusing on China's efforts to revive demand, diversify supply chains, and technological advancements [3].

The Hang Seng Index's year-to-date performance has been particularly impressive, with a 23% gain. Daily turnover hit a record high in April, with the average so far this year nearly doubling that of 2024 [4].

In conclusion, the Hong Kong Hang Seng Index's recent performance is a testament to the positive developments in the tech sector and the easing of US-China trade tensions. As long as these factors remain supportive, the HSI is likely to continue its upward trajectory.

References:
[1] https://finance.yahoo.com/quote/%5EHSI/
[2] https://www.scmp.com/business/china-business/article/3318368/hong-kong-stocks-power-nvidia-resuming-chip-sales-china
[3] https://www.fxempire.com/forecasts/article/hang-seng-index-news-bulls-eye-25000-on-fed-cut-bets-and-trade-deal-hopes-1534128
[4] https://finance.yahoo.com/news/hang-seng-stellar-run-takes-050605946.html