“Likely explanation: April was when Trump launched reciprocal tariffs. But factory expansion that month possibly due to orders pushing through in the likelihood Trump reversed, a deal was made, or new routes could be used. The month of May also takes into account the Labor Day Holiday that saw the closure of factories all over the country for 1 week. I don’t expect this reading to stay in contraction in June.”
The Hang Seng Index extended its gains from Tuesday in early trading, buoyed by tech and EV stocks that pushed the index higher.
Investor focus remains on further trade developments, the Chinese Services PMI (due June 5), and any stimulus chatter from Beijing. These elements could dictate whether the index breaks below 23,000 or reclaims 24,000.
Hong Kong Stocks Climb on Trade and Stimulus Bets
While US equity markets also advanced on June 3, with the Nasdaq Composite Index gaining 0.81%, hopes for de-escalating trade tensions and stimulus strengthened risk appetite. The Hang Seng Index rose 0.57% to 23,645 in early trading on June 4. Mainland China’s markets also posted gains, with the CSI 300 and Shanghai Composite Index up 0.51% and 0.34%, respectively.
Tech and EV Stocks Lead Gains
The Hang Seng Tech Index climbed 0.63% ahead of the anticipated Trump-Xi call. Tencent Holdings Ltd. (00700) rallied 1.39%, while Baidu (09888) and Alibaba (09988) advanced 1.34% and 0.44%, respectively.
EV stocks extended their gains, with BYD (1211) rallying 2.75% and Li Auto (2015) rising 1.98%. Positive delivery numbers for May continued to support sector momentum.