Hong Kong stocks extend gains as upbeat China economic outlook boosts investor confidence

The Hang Seng Index rose 0.6 per cent to 23,827.78 at the close, the highest level since March 24. The Hang Seng Tech Index gained 0.5 per cent. On the mainland, the CSI 300 Index climbed 0.5 per cent and the Shanghai Composite Index added 0.2 per cent.

Electric-vehicle makers led the broader market, with Li Auto rising 4.1 per cent to HK$115.50 and BYD also climbing 4.1 per cent to HK$462.60. Alibaba Group Holding gained 1.2 per cent to HK$123.10 and Tencent Holdings added 0.7 per cent to HK$520.50. Among the laggards, Trip.com Group slipped 1.1 per cent to HK$500, after Morningstar said falling prices for hotels and air tickets would hurt revenue growth even as the online travel agency posted a 16 per cent year-on-year increase in quarterly revenue.

“China’s economic recovery is under way, but mildly and slowly, and expectations are growing for a cut in interest rates and banks’ reserve requirement ratio,” said Yan Zhaojun, an analyst at Zhongtai Securities. “A sustainable flow of capital into the Hong Kong market would require an end to the deflationary trend and an improvement in consumer confidence.”

Morgan Stanley on Wednesday raised China’s economic growth forecast for 2025 to 4.5 per cent from 4.2 per cent and for 2026 to 4.2 per cent from 4 per cent. The US investment bank said in a report that it expected China’s central bank to cut the policy rate by 15 to 20 basis points and the reserve requirement ratio by half a percentage point by the end of the year.