On Monday, the Hang Seng Index climbed by 682 points, or 3.0%, to close at 23,549. This marks the index's eighth consecutive day of gains, reaching its highest level in one and a half months. This rally was fueled by a significant uptick in U.S. futures following an agreement between the United States and China to a 90-day pause on their trade tensions, accompanied by a notable tariff reduction. Washington announced it would reduce duties on Chinese imports to 30% from the previous 145%, while Beijing committed to lowering tariffs on U.S. imports to 10% from 125%.
Additionally, market sentiment received a boost from data indicating a nearly 10% year-over-year increase in car sales in China for April. The technology sector led the market's gains, with its index rising approximately 5%, thanks in part to substantial increases in shares of companies such as Trip.com, which rose 6.6%, Tencent Holdings, which gained 4.5%, and Meituan, up by 2.5%. There were also positive movements in property, consumer, and financial shares, spurred by reports of U.S.-based hedge funds increasing their bullish positions in Chinese equities. However, the upward momentum faced some limitations due to weak consumer and producer price index data from mainland China, where consumer prices declined for the third consecutive month, and producer prices experienced their sharpest contraction in six months.
