The Hang Seng Index in Hong Kong continues its recent rally, rising 4% and approaching historic highs around 8,400-8,450. The Chinese stock market is not only reacting positively to any easing of the U.S. president’s protectionist policies, but also benefiting from gains in the technology, industrial, and retail sectors.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appThe Hang Seng China Enterprises Index (HSCEI), represented by the CNH.cash contract, has surged nearly 23% over the past month. Source: xStation5
Are Tariffs Less of a Threat?
China’s economic future seemed uncertain when Donald Trump campaigned on 60% tariffs for all imports from China. The HSCEI spent a few months 2024 in decline, fearing Trump's return to the White House. However, reports of amiable diplomatic relations between U.S. and Chinese leaders and a lack of concrete tariff announcements helped improve market sentiment in Hong Kong.
The new tariffs on China officially took effect on Monday, February 4, but the initial 60% threat was reduced to just 10%. Given Trump’s history of extreme trade policies, any concession is seen as a pro-market signal, reflected again in today’s HSCEI rally, as investors believe further tariff increases will be delayed until at least April.
Beyond AI: New Hope For Luxury
China’s market optimism is also supported by Hermès' strong earnings (RMS.FR: +2.4%), which help restore faith in the luxury sector after LVMH’s disappointing performance. The French fashion giant reported a 17.6% year-on-year increase in revenue, surpassing analysts' expectations by nearly €300 million. The best-performing segments were leather goods and saddlery, accounting for nearly half of Q4 2024 revenues.
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
