Hong Kong stocks close mixed, Hang Seng Index up 0.19%

Hong Kong's stock market closed mixed on Monday, with the Hang Seng Index rising 0.19% to 24,906.81 points. The Hang Seng China Enterprises Index fell 0.08% to 8,888.08 points, and the Hang Seng Tech Index dropped 0.01% to 5,460.02 points. The market saw a mixed performance despite the overall positive trend.

Hong Kong's stock market closed mixed on Monday, with the Hang Seng Index rising 0.19% to 24,906.81 points. The Hang Seng China Enterprises Index fell 0.08% to 8,888.08 points, and the Hang Seng Tech Index dropped 0.01% to 5,460.02 points. The market saw a mixed performance despite the overall positive trend.

Trading in Hong Kong was subdued on Monday ahead of the expiry of the US-China tariff deadline and earnings from China’s biggest technology companies [1]. The Hang Seng Index fluctuated between gains and losses, rising 0.2% to 24,906.90 at the noon break. The Hang Seng Tech Index added 0.1% [1]. On the mainland, the CSI 300 Index and the Shanghai Composite Index gained at least 0.5% [1].

BYD Electronic International jumped 5.7% to HK$38.52 and Xinyi Solar Holdings rallied 4.1% to HK$3.29. Alibaba Group Holding added 1.7% to HK$118.30. Limiting gains, Macau casino operator Galaxy Entertainment slumped 3.5% to HK$39.30 and Chow Tai Fook Jewellery Group lost 2.2% to HK$13.70 [1].

Investors are in for an eventful week, with developments awaited on the tariff front, economic data, and earnings results. The 90-day tariff ceasefire between Beijing and Washington expires on Tuesday following a third round of talks in Stockholm last month that yielded no substantial agreement [1]. UBS’ wealth management unit said last week that the tariff on Chinese exports to the US may eventually range between 30 and 40% [1].

Corporate earnings will also be in focus. Some of the biggest constituents in the Hang Seng Index are due to disclose interim reports this week, with Tencent Holdings on Wednesday, and NetEase and JD.com on Thursday [1]. US inflation data for July is due on Tuesday, while China will release its key July economic data on Friday [1].

The Hang Seng closed almost flat at 24,911 on Wednesday after dipping slightly in morning deals. Traders digested comments from President Trump, who said the U.S. was close to a trade deal with China and that he would meet President Xi before year-end if an agreement is reached [3]. Investors also looked ahead to key Chinese economic data, including trade figures on Thursday and inflation on Saturday, amid concerns over rising trade barriers and persistent deflation risks [3].

Modest gains in consumer and tech stocks came as U.S. futures surged ahead of more corporate earnings and speeches from Fed officials later today [3]. Meanwhile, financials and property fell slightly. Pop Mart Intl. (7.9%), BYD Electronics (6.7%), and Akeso Inc. (4.7%) gained while Cathay Pacific fell 9.1% on weak H1 results, alongside Li Auto (-5.4%), Anta Sports (-3.2%) [3].

The Hang Seng Index edges higher ahead of the US-China trade truce deadline, with earnings and Chinese data in focus. Tech and EV stocks lift the Hang Seng Index, amid easing concerns over US chip export restrictions to China [4]. Tencent and Alibaba earnings could sway the Hang Seng Index direction alongside trade headlines and data [4].

Despite the recent market adjustment, there are still many positive factors behind the Hong Kong stock market. One notable phenomenon is that the capital from the south continues to be active recently, showing a trend of "buying more as it falls" [5]. Data shows that on the day of the major drop in the Hong Kong stock market on November 14, the southbound Hong Kong Stock Connect funds had a net inflow of 19.656 billion Hong Kong dollars, marking the second largest net daily inflow so far this year [5].

Another positive factor benefiting Hong Kong stocks is the further steady growth in the performance of leading companies [5]. For example, Tencent's financial report for the third quarter of 2024 showed a revenue of 167.193 billion yuan, an 8% year-on-year increase. The gross profit and operating profit (Non-IFRS) were 88.828 billion yuan and 61.274 billion yuan, respectively, with a year-on-year increase of 16% and 19% [5].

References:
[1] https://www.scmp.com/business/china-business/article/3321400/hong-kong-stocks-dip-us-china-tariff-deadline-and-alibaba-tencent-results
[3] https://www.tradingview.com/news/te_news:475667:0-hang-seng-little-changed-ahead-of-china-data/
[4] https://www.fxempire.com/forecasts/article/hang-seng-index-news-stocks-climb-as-traders-eye-truce-extension-and-earnings-1540240
[5] https://www.moomoo.com/news/post/44463083/record-tr4cking-news-what-to-expect-in-the-week-ahead-earnings-from-circle