Hong Kong's Hang Seng Index climbed over 2% on Monday, reaching 25,103—its highest level since June 5—as investor optimism over potential Chinese stimulus measures intensified. The rally made it the best-performing major benchmark in Asia, contrasting with declines in South Korea's Kospi and Japan's Nikkei 225.
The surge follows a string of weak economic data from China, including second-quarter GDP growth of just 4.3%, below the government's annual target range of 4.5% to 5%. According to the Financial Times, Beijing officials are expected to prioritize accelerating bond issuance at the upcoming Politburo meeting to counter the slowdown, which has been exacerbated by the US-Iran conflict's impact on trade and supply chains.
Goldman Sachs analysts noted in a recent report that if the deceleration continues, the full-year growth target is at risk. While Chinese exports remain robust, subdued household confidence continues to weigh on domestic demand, with retail sales and housing prices showing persistent weakness. Historically, the Hang Seng and Shanghai Composite have rallied on expectations of large-scale stimulus packages.
Alibaba stock was the standout gainer in the Hang Seng today, surging after the launch of its Qwen 3.8 Max AI model and a partnership to integrate the technology into Apple iPhones in China. The move underscores Beijing's strategic focus on artificial intelligence, as President Xi Jinping recently announced a new AI Alliance comprising 29 nations and pledged continued investment in the sector.
Chinese AI firms have made notable progress, with Moonshot's Kimi K3 model outperforming offerings from US companies like Anthropic and OpenAI. Moonshot is reportedly planning an IPO in Hong Kong. Other gainers in the Hang Seng included CNOOC, Semiconductor Manufacturing International (SMIC), Aluminum Corporation of China, and Laopu Gold.
From a technical perspective, the Hang Seng Index has rebounded sharply from a June low of 22,504, breaking above key resistance at 24,185 and the psychological 25,000 level. After underperforming other Asian indices earlier this year, the index appears poised for further gains, with the next target around 26,000.
For related coverage, see our reports on Alibaba's AI deal with Apple and previous Hang Seng movements amid GDP data.
This article is for informational purposes only and does not constitute financial advice.
